INDUSTRY CHANGES IN NEWS
Vancouver, B.C.-based Western Forest Products Inc. (TSX:WEF) says it has reached an agreement to sell Tree Farm Licence 60 ("TFL 60") and related assets on Haida Gwaii to Taan Forest Limited Partnership ("Taan"), a partnership of the Council of the Haida Nation and Haida Enterprise Corporation, the business arm of the Haida Nation. In a company release, Western stated that under the terms of the sale, Western will receive net proceeds of approximately $11.6 million and certain ongoing rights to cedar logs harvested by Taan. Taan will assume substantially all of the obligations of Western on Haida Gwaii. The net proceeds from the sale will be used to pay down the Company's debt in accordance with its lending agreements. It is expected that the agreement will close before the end of the year.
"We have been in discussions regarding this sale with the Haida Nation for more than two years and the Minister of Forests has already provided notice that the TFL sale can now proceed,” said Dominic Gammiero, Chairman and Chief Executive Officer. “As the average annual timber harvested off TFL 60 by Western over the past five years has been modest, the sales will have no impact on our long term operating rates at our eight lumber mills. Proceeds from the sale will further strengthen our balance sheet and provide us with additional flexibility to pursue strategic initiatives. We have no plans to sell any other Crown timber tenures,"
In other industry news this week, AbitibiBowater (NYSE: ABH) (TSX: ABH) announced that it will change the company name to Resolute Forest Products as of November 7, 2011.
"We are changing our name to Resolute Forest Products to better reflect the fundamental characteristics of the Company we are today, including our determination, strength and resolve to be a profitable, sustainable organization," stated Richard Garneau, President and Chief Executive Officer. "With our competitive cost structure, diversified revenue base and strong balance sheet, we are well-positioned for the long term."
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