Ainsworth announces successful completion of recapitalization

    VANCOUVER, July 29 /CNW/ - Ainsworth Lumber Co. Ltd. (TSX: ANS) (the
"Company") announced today that it has successfully completed its previously
announced recapitalization transaction (the "Recapitalization") after
receiving all necessary court, securityholder, term lender and regulatory
    The Recapitalization became effective as of July 29, 2008. The
Recapitalization was overwhelmingly approved on July 24, 2008 at meetings of
the holders of the Company's common shares and holders of its senior unsecured
notes. Of the 93% of the shares represented at the meeting, 99.99% voted in
favour of the Recapitalization. At the noteholders meeting, 82% of the
US$824 million principal amount of senior unsecured notes were represented and
100% of the votes cast were in favour of the Recapitalization. The plan of
arrangement giving effect to the Recapitalization was approved by the Supreme
Court of British Columbia on July 25, 2008.
    As a result of the Recapitalization, 100 million new common shares (which
includes approximately 9.5 million new common shares to be issued upon
exercise of a special class of unlisted warrants (with a nil strike price)
held by certain noteholders) have now been issued to (i) holders of its former
common shares as of July 28, 2008 on the basis of approximately 0.273 new
common shares for each former common share (4.0 million shares in aggregate)
and (ii) holders of its former senior unsecured notes which were cancelled
under the Recapitalization and certain backstop parties in connection with the
Recapitalization (96.0 million shares in aggregate). The new common shares
will be posted for trading on the TSX under the symbol "ANS" on Friday,
August 1, 2008.
    Under the Recapitalization, the Company also issued warrants (with a nil
strike price) to holders of its former common shares which will entitle them
to receive additional new common shares representing 8% of the new common
shares on a fully diluted basis if the Company's equity market capitalization
exceeds US$1.2 billion within five years of the effective date of the
Recapitalization. The new warrants will be posted for trading on the TSX under
the symbol "ANS.WT" on Friday, August 1, 2008.
    As part of the Recapitalization, the Company also enhanced its liquidity
by raising US$200 million through the issuance of new 11% senior unsecured
notes due 2015 (the "Notes") and reduced its total debt by US$464 million
(from US$985 million to US$521 million) through the cancellation of all five
series of its former senior unsecured notes in exchange for the common shares
described above, and the issuance of an additional US$150 million of Notes.
    Robert Allen, the CFO of Ainsworth, said that the Company's new board of
directors appointed under the Recapitalization effective today will be meeting
shortly to review management and governance matters.

    Ainsworth Lumber Co. Ltd.
    Suite 3194, Bentall 4
    P.O. Box 49307
    1055 Dunsmuir Street
    Vancouver, B.C. V7X 1L3
    Telephone: (604) 661-3200
    Facsimile: (604) 661-3201

    Forward-looking information provided in this news release relating to the
Company's expectations regarding Recapitalization and liquidity contains
forward-looking statements made pursuant to the "safe harbour" provisions of
the United States Private Securities Litigation Reform Act of 1995. The
Company believes that expectations reflected in such information are
reasonable, but no assurance is given that such expectations will be correct.
Forward-looking information is based on the Company's beliefs and assumptions
based on information available at the time the assumption was made and on
management's experience and perception of historical trends, current
conditions and expected further developments as well as other factors deemed
appropriate in the circumstances. Investors are cautioned that there are risks
and uncertainties related to such forward-looking information and actual
results may vary. The forward-looking information is made as of the date of
this news release and the Company assumes no obligation to update or revise it
to reflect new events or circumstances, except as explicitly required by
securities laws.

For further information:

For further information: Contact: Robert Allen, Chief Financial Officer,
(604) 661-3200

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Ainsworth Lumber Co. Ltd.

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