Enhances Existing Partnership to Serve China's Wood Deficit
TORONTO, Aug. 3, 2010 /CNW/ - Sino-Forest Corporation ("Sino-Forest") (TSX: TRE), a leading commercial forest plantation operator in China, is pleased to announce today the completion of its purchase of 230 million subscription shares in Hong Kong-listed Omnicorp Limited ("Omnicorp") (HKSE:0094) at a price per share of HK$1.82 for a consideration of HK$418.6 million or approximately US$53.7 million (the "Share Subscription"). The Share Subscription increased Sino-Forest's voting interest in Omnicorp from approximately 19.8% to approximately 53.5% of the enlarged issued share capital of Omnicorp.
On completion of the Share Subscription, Mr. Allen Chan was appointed Chairman and a non-executive director of Omnicorp and Mr. Judson Martin was appointed President and Chief Executive Officer and an executive director of Omnicorp. Mr. Chan is the Chairman and Chief Executive Officer and a director of Sino-Forest. Mr. Chan co-founded Sino-Forest in 1994. Mr. Martin is the Vice Chairman of Sino-Forest and has been a director of Sino-Forest since 2006. These appointments to the board of Omnicorp are effective immediately.
Sino-Forest also holds HK$212.3 million of existing convertible bonds of Omnicorp (the "Existing Convertible Bonds") that were acquired in November 2007 and February 2009. Assuming full conversion of the Existing Convertible Bonds, Sino-Forest's interest will increase to approximately 59.9% of the enlarged issued share capital of Omnicorp.
Omnicorp has a 60.4% ownership in Greenheart Resources Holdings Limited ("Greenheart"), and Sino-Forest, through its wholly owned subsidiary Sino-Capital Global Inc., owns a 39.6% minority stake. Greenheart is one of the largest forest concession owners and operators in Suriname, South America with a 178,000-hectare hardwood concession and harvesting rights.
Mr. Chan said "We are pleased to strengthen our partnership with Omnicorp, which will help us secure quality wood fibre for our customers in China. This strategic transaction increases our ownership interest in Greenheart and its hardwood concession in Suriname and represents exciting opportunities for our shareholders. Sustainable harvesting and exporting of processed wood products from Suriname will contribute to the country's economic development while helping to alleviate China's domestic wood deficit."
Mr. Martin said "Omnicorp will be able to leverage Sino-Forest's long established distribution network in China and benefit from Sino-Forest's broad experience to better service our customers in the Chinese market. I look forward to working with Omnicorp's management teams in Hong Kong and Suriname and to the next stage of Omnicorp's development."
About Omnicorp Limited
Omnicorp is a Hong Kong-based investment holding company. The principal activities of Omnicorp's subsidiaries consist of log harvesting, lumber processing, marketing and sales of logs and lumber products. Omnicorp's main subsidiary is Greenheart Resources Holdings Limited. Omnicorp's common shares have been listed on the Hong Kong Stock Exchange since 1988 under the symbol 0094. Omnicorp is majority owned by Sino-Forest Corporation, a leading, commercial forest plantation operator in China and listed on the Toronto Stock Exchange (TSX:TRE). Learn more at www.omnicorplimited.com.
About Sino-Forest Corporation
Sino-Forest is a leading, commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation trees and sales of standing timber, wood logs, and complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Omnicorp (HK:0094), a Hong Kong listed investment holding company with hardwood concessions and harvesting rights in Suriname, South America. Sino-Forest's common shares have traded on the Toronto Stock Exchange under the symbol TRE since 1995. Learn more at www.sinoforest.com.
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 Sino-Forest 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 are not limited to, changes in China and international economies; changes in currency exchange rates; changes in worldwide demand for Sino-Forest's products; changes in worldwide production and production capacity in the forest products industry; competitive pricing pressures for Sino-Forest's products; and changes in wood and timber costs.
SOURCE Sino-Forest Corporation
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