TEMISCAMING, QC, Sept. 15 /CNW Telbec/ - Tembec Inc. announced today that
Temlam Inc. and Jager Building Systems Inc., a subsidiary of Temlam Inc., have
made voluntary assignments in bankruptcy under the Bankruptcy and Insolvency
Act (Canada). Temlam Inc. is jointly owned on a 50/50 basis by Tembec Inc. and
Société générale de financement du Québec (SGF).
These assignments in bankruptcy follow the receipt, by Temlam Inc. and
Jager Building Systems Inc. of Notices of Intention to Enforce Security issued
by HSBC Canada bank on September 3, 2008. The companies were unable to cure
defaults under their financing arrangements due to current economic conditions
in the industry.
"Tembec has recently completed a successful recapitalization which has
given us a strong balance sheet and liquidity position, said James Lopez,
President and CEO of Tembec. It would not be prudent to risk further exposure
to these joint ventures through injection of additional capital at this time
in light of the current business climate and housing market. For this reason,
Tembec and SGF have decided to support the decision of the Boards of Directors
of the two companies and endorse this course of action. We regret the impact
that this will have on employees, customers and suppliers, but this is the
most prudent decision."
As a result of the filing, Tembec Inc. will immediately cease
proportionately consolidating the financial results of Temlam Inc. and Jager
Building Systems Inc. in its financial statements. This will result in a
reduction of approximately $50 million in the carrying value of Tembec Inc.'s
assets and liabilities with no material impact on earnings. During the
nine-month period ended June 2008, the two ventures had increased Tembec's
reported sales by $34 million and had generated negative EBITDA of $4 million.
PricewaterhouseCoopers Inc. will be acting as trustee for Temlam Inc. and
Jager Building Systems Inc.
Tembec is a large, diversified and integrated forest products company
which stands as the global leader in sustainable forest management practices.
With operations principally located in North America and in France, the
Company employs approximately 8,000 people. Tembec's common shares are listed
on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT.
Additional information on Tembec is available on its website at
This press release includes "forward-looking statements" within the
meaning of securities laws. Such statements relate to the Company's or
management's objectives, projections, estimates, expectations or predictions
of the future and can be identified by words such as "will", "anticipate",
"estimate", "expect" and "project" or variations of such words. These
statements are based on certain assumptions and analyses made by the Company
in light of its experience 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 our 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 Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
For further information:
For further information: Richard Fahey, Vice President, Communications
and Public Affairs, (819) 627-4387, firstname.lastname@example.org