Jemi closes buy of additional timberlands from Tembec
2014-12-22 09:55 ET - News Release
Also News Release (C-TMB) Tembec Inc (2)
Mr. Mike Jenks reports
JEMI FIBRE CORP. ANNOUNCES PURCHASE OF PRIVATE TIMBERLAND, ADDITIONAL FUNDING AND APPOINTMENT OF EXECUTIVE VICE-CHAIR AND NEW CFO
Jemi Fibre Corp. has completed the acquisition of approximately 4,000 hectares of additional private timberlands from Tembec Inc., as previously announced on Oct. 14, 2014. The timberlands are located in the regional district of East Kootenay, B.C., and are adjacent to the approximately 49,500 hectares of timberlands the company acquired from Tembec as previously announced on April 25, 2014, June 25, 2014, and Sept. 16, 2014.
The company also announces that it has agreed to borrow an additional $17,575,000 under facility B of the $30-million credit facility previously announced on Aug. 27, 2014. The funds were used to complete the acquisition of the new private timberland, and to repay the secured loans from Vertex One Asset Management and BG Capital Group Ltd. previously announced on June 25, 2014. The total amount owing under facility B, which is secured in senior position against all private timberland owned by the company, is $39,075,000.
In connection with the additional financing, the company amended the terms of both facility B and the $10-million facility A, previously announced on Aug. 27, 2014, to accelerate the timing of the company's ability to decrease the interest rate by 3 per cent if the company meets certain fixed charge coverage ratios. Based on the company's current financial performance, the interest rate on both facilities is anticipated to be at 13 per cent per annum payable at 11 per cent monthly and 2 per cent deferred. The repayment fee on both facilities has also been revised to 3 per cent if the loans are repaid at any time prior to maturity.
"The acquisition of more private timberland is another step forward in the company's strategic plan to grow its forestry asset base and provide stable, sustainable and substantive returns to our shareholders," commented Mike Jenks, chief executive officer. "Further, we are very pleased with the new financing. This has reduced our overall borrowing costs, increased our cash flow and demonstrates we are executing our plan to recapitalize our balance sheet. The company intends to continue to execute on this plan by raising equity in the near term and refinancing with lower-cost debt facilities which we announced on Aug. 28, 2014."
The company also wishes to announce that co-founder and chief financial officer, Georgina Martin, has been appointed executive vice-chair, and Tom Stefan has been appointed CFO of the company.
Mr. Stefan is a seasoned executive with 29 years of experience in management, growth, restructuring and corporate finance in resource-based companies. He was most recently CFO and vice-president finance at Taiga Building Products, responsible for executing a strategic realignment program, which included acquisitions, and product and geographic expansion. His career includes working in forest products, mining, public accounting and real estate. He has held positions of increasing responsibilities at NorskeCanada/Pacifica Papers (Toronto Stock Exchange), Bema Gold Corp. (TSX), Teck Corp. (New York Stock Exchange, TSX) and KPMG.