Sino-Forest Corporation Announces Convertible Senior Notes Offering



    Supplementary Information on Fujian Province Acquisition

    /NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
    STATES OR TO U.S. WIRE SERVICES/

    TORONTO, July 16 /CNW/ - Sino-Forest Corporation (the "Company") (TSX:
TRE and TRE.S) today announced that it is offering convertible senior notes in
the international markets. The Company has engaged Merrill Lynch and Credit
Suisse as underwriters of this offering. The anticipated size of the offering
will be US$300 million plus 15% over-allotment option. The final size and
details of the offering, including the interest rate payable on the notes, the
maturity date of the notes and the terms at which the notes will be
convertible into common shares of the Company, will be determined after
completion of marketing activities and is subject to prevailing market
conditions. The Company intends to use the net proceeds of the offering as
follows:

    
    -   approximately US$230 million as initial capital for the acquisition
        of commercial plantation forests in the Fujian Province of the
        People's Republic of China ("PRC") to develop fast-growing high
        yielding plantations. The Company intends to vertically integrate
        these plantations with its downstream wood processing facilities in
        the PRC.

        The Company has already entered into a non-binding memorandum of
        understanding under which the seller has agreed to sell to the
        Company 200,000 hectares of Chinese fir, pine and eucalyptus trees
        over a 10-year period. Under this memorandum of understanding, the
        consideration price shall not exceed RMB350 per cubic meter. The
        specific terms and conditions of the aforementioned purchases in
        Fujian Province are to be determined upon the execution of definitive
        agreements between the relevant parties;

    -   approximately US$15 million to lease land and plant with Jatropha
        trees.

    -   the balance of the net proceeds will be employed for general working
        capital purposes.
    

    For details of the Jatropha description please refer to previous release.
    The specific terms and conditions of the aforementioned acquisitions are
to be determined upon the execution of the definitive agreements between the
relevant parties. The Company intends to make a further public announcement if
and when its offering plan becomes definitive. No assurance can be given that
the Company will not terminate this preparation process or alter the amount or
terms of the offering due to market conditions or otherwise.

    This press release is not for distribution, directly or indirectly, in or
into the United States (including its territories and possessions, any State
of the United States and the District of Columbia).
    This press release does not constitute or form a part of any offer or
solicitation to purchase or subscribe for securities in the United States or
any other jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No securities of Sino-Forest Corporation may be offered
or sold in the United States unless they are registered under the US
Securities Act of 1933, amended, or exempt from registration. Sino-Forest
Corporation does not intend to conduct a public offering in the United States
and the securities referred to herein have not been and will not be registered
into the United States.

    About Sino-Forest Corporation

    Sino-Forest Corporation is a leading commercial forestry plantation
operator in China. The Canadian company started its operations in 1994 and was
of the first few foreign and privately managed operators involved in forest
products in China. Its principal businesses include the ownership and
management of forestry plantation trees and sales of standing timber, logs and
wood chips, and complementary manufacturing of downstream engineered-wood
products. The Corporation's common shares trade 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: DAVE HORSLEY - Senior Vice President & Chief
Financial Officer, Tel: (905) 281-8889, Email: davehorsley@sinoforest.com;
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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