VANCOUVER, British Columbia, June 12, 2024 (GLOBE NEWSWIRE) -- Conifex Timber Inc. ("Conifex") (TSX: CFF) announced today that it has completed a $25 million secured term loan (the "Term Loan") with PenderFund Capital Management Ltd. ("Pender"), an independent investment firm located in Vancouver, British Columbia. A portion of the Term Loan was utilized to repay and retire Conifex's existing lumber segment credit facility with Wells Fargo Capital Finance Corporation Canada in the amount of approximately $11 million. The balance of the Term Loan will be available for working capital and general corporate purposes.
“On behalf of the entire Conifex team, we are delighted with the show of support PenderFund provided. They studied our business structure and objectives and provided us a tailored financing solution that provides our management team significant flexibility to strengthen our operations in Mackenzie and paves the way for improved operating results,” commented Ken Shields, Conifex CEO and Chairman.
“We understand that British Columbia’s forestry sector is currently facing challenges on several fronts, however we are optimistic about the long-term value of Conifex’s business. Amongst other strengths, Conifex enjoys excellent access to timber supply and possesses an important diversifying income stream from its power generation assets,” said Geoff Castle, Lead Portfolio Manager, Fixed Income at PenderFund.
The Term Loan has a term of 5 years, bears interest of 14% per annum and is substantially secured by Conifex's lumber segment assets. Conifex has also agreed to issue 3.6 million common share purchase warrants to Pender having a 5 year term. Each warrant is exercisable into one common share for $0.75. Pursuant to applicable securities laws, the warrants are subject to a hold period of four months and one day from issuance.
Having completed the Term Loan, Conifex is now evaluating opportunities to secure a working capital facility to further help ensure sufficient liquidity to sustain operations through a period of below normal lumber prices. Across its lumber and power operations, Conifex's total long-term debt, including the PenderFund Term Loan is approximately $75.3 million having a weighted average interest rate of 9.29%.
Conifex also announced today that it expects to hold its annual shareholders' meeting in or around the third quarter of 2024. While Conifex typically holds its annual shareholder meeting in summer, Conifex considered a later meeting was necessary while it focused on completing the Term Loan and continues to focus on evaluating a working capital facility and other business opportunities.
Conifex was advised by Raymond James Ltd.
For further information, please contact:
Trevor Pruden
Chief Financial Officer
(604) 216-2949
About Conifex Timber Inc.