Canfor and Conifex say an investment agreement between the two lumber producers for $30 million has been completed. The loan by Canfor to Conifex Inc., a wholly-owned subsidiary of Conifex Timber is for five years, with the proceeds to be used for general corporate purposes.
Securing the loan, finalized Aug. 5, is a first lien on a forest license with 200,000 m3 of annual cut held indirectly by a subsidiary of Conifex Inc. The companies say that after 17 months, Conifex Inc. can elect to pay the principal amount of the secured note by a transfer of all of the issued common shares of the subsidiary. After 12 months, Canfor also has the option to convert the note into an ownership interest in the forest license.
Based in Vancouver, Conifex and its subsidiaries are involved in timber harvesting, reforestation, forest management, and the manufacture, sale and distribution of dimension lumber. Lumber products are sold in the United States, Chinese, Canadian and Japanese markets. The company also has a bioenergy/power generation facility at Mackenzie, BC.
Also based in Vancouver, Canfor is an integrated forest products company with interests in British Columbia, Alberta, North and South Carolina, Alabama, Georgia and Mississippi. The company produces primarily softwood lumber and specialized wood products. The company also owns 51 percent interest in Canfor Pulp Products, which produces northern bleached softwood kraft pulp, kraft paper and bleached chemi-thermo mechanical pulp.
From Woodworking Network: http://www.woodworkingnetwork.com/news/canadian-news/lumber-supplier-canfor-loans-30-million-conifex