TORONTO, Feb. 6 /CNW/ - Sino-Forest Corporation ("Sino-Forest" or the
"Company") (TSX: TRE), a leading commercial forestry plantation operator in
China, is pleased to announced that it has acquired 55 million ordinary shares
in the capital of Omnicorp Limited ("Omnicorp") (HKSE:0094), a Hong Kong
listed company, and Omnicorp 4% secured convertible bonds due 2009 (the
"Convertible Bonds") with an aggregate principal amount of approximately
US$21.6 million (i.e. HK$168 million) (the "Sale Bonds").
The aggregate purchase price paid by Sino-Forest was approximately US$4.3
million in cash for the Omnicorp shares at a price of HK$0.60 per share, and
the issuance of approximately 2.7 million common shares in the capital of
Sino-Forest at a price of Cdn$10.00 per share for the Sale Bonds. The issuance
of the Sino-Forest shares represents a dilution of approximately 1.4% of its
existing outstanding shares. The acquisition was completed in the secondary
market from various third parties including Simon Murray (or an entity he
controls), a director of Sino-Forest. The value of the Omnicorp shares and
Sale Bonds being sold by Mr. Murray to Sino-Forest represents approximately
5.5% of the aggregate value of the overall transaction.
Upon the completion of such transaction, Sino-Forest's stake in Omnicorp
has increased to approximately 20.0% of Omnicorp's outstanding shares as well
as 89.6% of the outstanding Convertible Bonds. The Convertible Bonds held by
Sino-Forest are convertible into an additional 106,164,150 Omnicorp ordinary
shares at a price of HK$2.00 per share at any time prior to November 9, 2009,
subject to certain terms and restrictions. Assuming the full conversion by
Sino-Forest of the acquired Convertible Bonds, subject to certain terms and
conditions of the Convertible Bonds, Sino-Forest would own approximately 40.2%
of Omnicorp's outstanding shares.
Omnicorp owns a 60.4% interest in its subsidiary Greenheart Resources
Holdings Limited ("Greenheart") - one of the largest natural forest concession
owners and operators in Suriname, South America and owns 180,000 hectares of
tropical hardwood concession and cutting rights in Suriname, with a
harvestable standing stock volume of approximately 4.4 million cubic metres.
Greenheart's concession and cutting rights represents 13% of the largest
concession type available in Suriname. Over 60% of the world's growing stock
is hardwood, with approximately 45% coming from Latin America, while
Asia-Pacific is the largest market for tropical hardwood logs, representing
approximately 59% of the total global market.
Mr. Allen Chan, Sino-Forest's Chairman & CEO, said "We are very pleased
to increase our equity stake in Omnicorp and indirectly in Greenheart.
Omnicorp's strategy will be to source quality fibre from outside China,
especially tropical hardwood to be sold in the Chinese markets."
Mr. Chan added, "As Greenheart adheres to the sustainable forestry
management and silviculture systems developed by CELOS (The Centre for
Agricultural Research in Suriname) and practised by the Suriname Government,
we are confident that Greenheart will operate in a responsible and
About Sino-Forest Corporation
Sino-Forest Corporation is a leading commercial forestry plantation
operator in the Peoples Republic of China. The Canadian company started its
operations in 1994 and was one 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, wood logs and complementary manufacturing of downstream
engineered-wood products. The Corporation'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: DAVE HORSLEY - Senior Vice President & Chief
Financial Officer, Tel: (905) 281-8889, Email: firstname.lastname@example.org;
LOUISA WONG - Senior Manager, Investor Communications & Relations, Tel: +852
2514 2109, Email: email@example.com