Sino-Forest Announces Further $38.5 Million Bought Deal, Increasing Size of Offering to $330 Million



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

    TORONTO, May 22 /CNW/ - Sino-Forest Corporation (the "Corporation")
(TSX:TRE) is pleased to announce that it has entered into a further agreement
with Credit Suisse Securities (Canada) Inc. and Dundee Securities Corporation,
to include a syndicate of underwriters to be determined (collectively, the
"Underwriters"), pursuant to which the Underwriters have agreed to purchase an
additional approximately 3.5 million common shares ("Shares") of the
Corporation on a bought deal basis, at a price of Cdn.$11.00 per Share for
aggregate gross proceeds of Cdn.$38.5 million. Together with the previously
announced bought deal, the Underwriters have agreed to purchase approximately
30 million common shares of the Corporation on a bought deal basis, at a price
of Cdn.$11.00 per Share for aggregate gross proceeds of $330 million. The
Underwriters have been granted over-allotment options, exercisable until 30
days after the closing of the offering, enabling them to purchase up to an
additional 15% of the number of Shares sold pursuant to the offering at a
price of Cdn.$11.00 per Share.
    The offering is scheduled to close on or about June 8, 2009 and is
subject to certain conditions including, but not limited to, the receipt of
all necessary approvals including the approval of the Toronto Stock Exchange.
    The net proceeds of the offering will be used primarily for the
acquisition of commercial plantation forests in Jiangxi Province in the
People's Republic of China and for general corporate purposes, subject to
reaching an agreement with the vendor on the final terms of a master
agreement.
    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 company'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 Company 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 Company's products; changes in worldwide production
and production capacity in the forest products industry; competitive pricing
pressures for the Company'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 - Manager, Investor
Communications & Relations, Tel: +852-2514-2109, Email:
louisa-wong@sinoforest.com

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Sino-Forest Corporation

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