Sino-Forest Announces Exercise of Over-Allotment Option



    
    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
    THE U.S./
    

    TORONTO, May 27 /CNW/ - Sino-Forest Corporation (the "Corporation")
(TSX:TRE) is pleased to announce that it has received notice from Credit
Suisse Securities (Canada) Inc. and Dundee Securities Corporation that the
underwriters have exercised their over-allotment option to acquire an
additional 4,500,000 common shares (each an "Optional Share") at a price of
Cdn.$11.00 per Optional Share for gross proceeds to the Corporation of
Cdn.$49,500,000. The option was granted to the underwriters in connection with
the public offering of 30,000,000 common shares at a price of Cdn.$11.00 per
common share for gross proceeds of Cdn.$330,000,000 (the "Offering"). As a
result of the exercise of the over-allotment option, 34,500,000 common shares
of the Corporation in aggregate are being purchased by the underwriters for
total gross proceeds of Cdn.$379,500,000.
    The Offering, which is scheduled to close on or about June 8, 2009,
subject to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the Toronto Stock Exchange,
is being completed by way of a short form prospectus through a syndicate of
underwriters led by Credit Suisse Securities (Canada) Inc. and Dundee
Securities Corporation and including Merrill Lynch Canada Inc., Scotia Capital
Inc. and TD Securities Inc. The sale of the Optional Shares will close
concurrently with the closing of the Offering.
    The net proceeds of the Offering, together with the net proceeds from the
sale of the Optional Shares, will be used by the Corporation primarily for the
acquisition of commercial plantation forests in Jiangxi Province in the
People's Republic of China, subject to reaching an agreement with the vendor
on the final terms of a master agreement, and for general corporate purposes.
    The Corporation, through its wholly-owned subsidiary Sino Panel (China)
Investments Limited, is currently negotiating, and expects to enter into,
shortly after the closing of the Offering, a master agreement to acquire
between 15.0 million and 18.0 million cubic meters of wood fiber located in
plantations in Jiangxi Province over a three-year period with a price not to
exceed RMB300 per cubic meter, to the extent permitted under the relevant PRC
laws and regulations. Under the contemplated master agreement, the Corporation
currently plans to acquire such amount of wood fiber within an area of between
150,000 and 300,000 hectares of plantation trees to achieve an estimated
average wood fiber yield of approximately 100 cubic meters per hectare.
Pursuant to the terms of the contemplated master agreement, the Corporation
would not be obligated to acquire any of these plantation trees which do not
meet the Corporation's specific requirements. Subject to reaching an agreement
with the vendor on the final terms of the master agreement, the Corporation
expects to have pre-emptive rights to lease the underlying plantation land at
a price, if permitted under the relevant PRC laws and regulations, not to
exceed RMB450 per hectare per annum for 30 years. The expected land lease
could be increased up to 50 years from the harvest date as permitted under PRC
laws and regulations. The specific terms and conditions of such purchase or
lease are to be determined following the execution of the definitive master
agreement between Sino Panel (China) Investments Limited and the vendor upon
the authorization of the original plantation rights holders, and subject to
the requisite governmental approval and plantation rights registration with
the local forestry bureau in compliance with the relevant PRC laws and
regulations.

    These materials are not an offer for sale of securities in the United
States. The securities have not been registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and may not be sold in the United
States absent registration or an exemption from registration under the
Securities Act. The Corporation does not intend to register any part of the
offering in the United States or to conduct a public offering of securities in
the United States.

    About Sino-Forest Corporation

    Sino-Forest Corporation is a leading commercial forest plantation
operator in China. Its principal businesses include the ownership and
management of forest plantation trees, the sale of standing timber and wood
logs, and the complementary manufacturing of downstream engineered-wood
products. The Corporation's common shares have traded on the Toronto Stock
Exchange under the symbol TRE since 1995.

    Please note: This press release contains projections and forward-looking
statements regarding future events. Such forward-looking statements are not
guarantees of future performance of the Corporation and are subject to risks
and uncertainties that could cause actual results and company plans and
objectives to differ materially from those expressed in the forward-looking
statements. Such risks and uncertainties include, but not limited to, changes
in China and international economies; changes in currency exchange rates;
changes in worldwide demand for the Corporation's products; changes in
worldwide production and production capacity in the forest products industry;
competitive pricing pressures for the Corporation's products and changes in
wood and timber costs.





For further information:

For further information: Sino-Forest Corporation: Toronto, Dave Horsley,
Senior Vice President & Chief Financial Officer, Tel: (905) 281-8889, Email:
davehorsley@sinoforest.com; Hong Kong, Louisa Wong, Senior Manager, Investor
Communications & Relations, Tel: +852 2514 2109, Email:
louisa-wong@sinoforest.com

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Sino-Forest Corporation

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