Western announces completion of rights offering


    TSX: WEF

    DUNCAN, BC, Jan. 21 /CNW/ - Western Forest Products (TSX: WEF) ("Western"
or the "Company") today announced that it has completed its $50 million rights
offering, which was announced on December 1, 2008.
    A total of approximately 188.7 million common shares were subscribed for
by rightholders pursuant to the basic subscription right, including exercise
of the basic subscription right by Tricap Management Limited ("Tricap"),
Western's largest shareholder, for proceeds of approximately $35.9 million.
The shares will be issued not later than January 27, 2009.
    Due to the exercise of the additional subscription privilege by
rightholders, including Tricap, it will not be necessary for Tricap to
purchase shares pursuant to the terms of the standby purchase agreement.
Pursuant to the additional subscription privilege, rightholders will purchase
the approximately 74.5 million shares not otherwise purchased by rightholders
under the basic subscription right for gross proceeds of approximately $14.1
million. As such, a total of approximately 263.2 million shares will be issued
in connection with the rights offering, for aggregate proceeds of $50 million.
    Prior to this rights offering, Tricap beneficially owned 49% of the
outstanding common shares. Western may, at its option, permit the exercise of
only that portion of the rights owned by Tricap that would result in Tricap
beneficially owning, or exercising control or direction over, not more than
49% of the common shares now outstanding (the "Exchange Limitation"). For that
number of common shares that would otherwise have been issued on an exercise
of rights but for the application of the Exchange Limitation, Western will
deliver non-voting shares in lieu of an equivalent number of common shares.
Upon the closing of the rights offering, Tricap will hold a total of
63,026,544 common shares and 338,945,860 non-voting shares or approximately
49% and 100% of Western's issued and outstanding common shares and non-voting
shares, respectively.
    Upon the closing of the rights offering, Western expects a total of
approximately 128,625,600 common shares and 338,945,860 non-voting shares will
be issued and outstanding.
    The net proceeds from the rights offering will be used to reduce
indebtedness under Western's revolving line of credit, thereby providing
additional liquidity. The amounts repaid under this facility will be available
to be redrawn for general corporate purposes.
    As previously announced, one of Western's existing lenders agreed to
provide $15 million of interim additional financing pending the closing of the
rights offering, conditional on Brookfield Asset Management Inc., an affiliate
of Tricap, providing the lender with a letter of credit in the amount of $15
million. Upon the closing of the rights offering, the letter of credit will be

    Forward Looking Statements and Information

    This press release contains statements which constitute forward-looking
statements and forward-looking information within the meaning of applicable
securities laws. Those statements and information appear in a number of places
in this document and include statements and information regarding our current
intent, belief or expectations primarily with respect to market and general
economic conditions, future costs, expenditures, available harvest levels and
our future operating performance, objectives and strategies. Such statements
and information may be indicated by words such as "estimate", "expect",
"anticipate", "plan", "intend", "believe", "should", "may" and similar words
and phrases. Readers are cautioned that it would be unreasonable to rely on
any such forward-looking statements and information as creating any legal
rights, and that the statements and information are not guarantees and may
involve known and unknown risks and uncertainties, and that actual results and
objectives and strategies may differ or change from those expressed or implied
in the forward-looking statements or information as a result of various
factors. Such risks and uncertainties include, among others: general economic
conditions, competition and selling prices, changes in foreign currency
exchange rates, labour disruptions, natural disasters, relations with First
Nations groups, changes in laws, regulations or public policy, misjudgments in
the course of preparing forward-looking statements or information, changes in
opportunities and other factors referenced under the "Risk Factors" section in
our Annual Information Form dated March 4, 2008, under the "Risks and
Uncertainties" section of our MD&A in our 2007 Annual Report and those
referenced in our MD&A in our most recently filed quarterly report. All
written and oral forward-looking statements or information attributable to us
or persons acting on our behalf are expressly qualified in their entirety by
the foregoing cautionary statements. Except as required by law, Western does
not expect to update forward-looking statements or information as conditions

    Western Forest Products

    Western is an integrated Canadian forest products company and the largest
coastal British Columbia woodland operator and lumber producer with an annual
available harvest of approximately 7.5 million cubic metres of timber of which
approximately 7.3 million cubic metres is from Crown lands and lumber capacity
in excess of 1.5 billion board feet from eight sawmills and four
remanufacturing plants. Principal activities conducted by the Company include
timber harvesting, reforestation, sawmilling logs into lumber and wood chips
and value-added remanufacturing. Substantially all of Western's operations,
employees and corporate facilities are located in the coastal region of
British Columbia while its products are sold in over 30 countries worldwide.

For further information:

For further information: Dominic Gammiero, President & CEO, (250)
715-2207; Murray Johnston, Vice President & CFO, (250) 715-2209

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