Tembec announces conditional sale of land in British Columbia
MONTREAL, April 25, 2014 /CNW Telbec/ - Tembec today announced that it has reached an agreement to sell approximately 49,500 hectares of land located within the Regional District of East Kootenay, British Columbia, to Jemi Fibre Corp. ("Jemi") for a price of $35 million ("Transaction"). The Transaction includes a seven year earn-out provision pursuant to which Tembec would be entitled to additional payments of at least $2.1 million. The sale is expected to close in two phases: the closing of the first phase in connection with the sale of approximately 17,700 hectares for a price of $15 million is expected to occur in June 2014 and the closing of the second phase in connection with the sale of approximately 31,800 hectares for a price of $20 million is expected to occur in September 2014. The closing of both phases of the Transaction is subject to Jemi obtaining adequate financing and other customary conditions. There can be no assurance that the Transaction will be consummated in whole or in part.
The Transaction is part of the previously announced BC Land Sale Initiative. The Company has set an objective of realizing up to $75 million in land sales by December 2014. To date, the Company has realized a total of $23.2 million. Assuming that the aforementioned transactions close as contemplated, total land sales will have reached $60.3 million, including the $2.1 million of deferred payments. The Company owns a further 7,433 hectares of lands in British Columbia for which it actively continues to solicit potential buyers. Based on transactions to date, the Company is reducing its objective and now expects to realize up to $70 million in land sales by December 2014. There can be no assurance that the Company will attain the stated objective or that it will do so within the specified time period.
Tembec is a manufacturer of forest products - lumber, pulp, paper and specialty cellulose - and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has some 3,500 employees and annual sales of approximately $1.6 billion. Tembec is listed on the TSX (TMB).
This press release includes "forward-looking statements" within the meaning of securities laws. Such statements relate, without limitation, to the Company's or management's objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as "may", "will", "could", "anticipate", "estimate", "expect" and "project", the negative or variations thereof, and expressions of similar nature. Forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience, information available to it and its perception of future developments. Such statements are subject to a number of risks and uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs and other factors identified in the Company's periodic filings with securities regulatory authorities. Many of these risks are beyond the control of the Company and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. The forward-looking statements contained herein reflect the Company's expectations as of the date hereof and are subject to change after such date. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities legislation.
SOURCE TembecFor further information:
Executive Vice President, Finance and Chief Financial Officer
Tel.: 819 627-4268
Vice President, Human Resources and Corporate Affairs
Tel.: 416 775-2819