Jemi Fibre completes Tembec timberlands acquisition
2014-06-25 09:26 ET - News Release
Mr. Michael Ainsworth reports
JEMI FIBRE CORP. COMPLETES TEMBEC TIMBERLANDS ACQUISITION
Jemi Fibre Corp. has completed the first of two timberlands acquisitions from Tembec Inc., previously announced on April 25, 2014.
The company has closed on the acquisition of approximately 17,700 hectares and timber rights for an additional approximately 1,900 hectares for a purchase price of $15-million. The timberlands are located in the regional district of East Kootenay, British Columbia, and are the first phase of a two-phase purchase of timberlands from Tembec. The second phase is for approximately 31,800 hectares, which the company anticipates closing in September, 2014, for a purchase price of $20-million. The closing of the second phase is subject to the company obtaining adequate financing and other customary conditions. There can be no assurance that the second phase will be consummated in whole or in part.
Concurrent with the completion of the timberlands acquisition, the company is pleased to announce that it has completed a senior secured debt financing pursuant to which the company issued notes to investment funds managed by Vertex One Asset Management for $11-million. The Vertex loan has an upfront fee of 5 per cent, a term of six months and bears an interest rate of 17 per cent per annum. The company has the option to renew the loan for an additional six-month term and during the second term the loan would bear an interest rate of 22 per cent. Additionally, the company is pleased to announce that it has completed an additional secured financing with BG Capital Group Ltd. for $5-million. The BG Capital loan is subordinate to the Vertex loan, has a term of 12 months and bears an interest rate of 22 per cent.
The company intends to refinance the Vertex loan and the BG Capital loan in connection with phase two of the Tembec timberlands acquisition.
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