News-Times Staff Report
VANCOUVER, B.C. — Conifex Timber Inc. announced Wednesday that the company had secured $130 million in financing for the modernization and restart of its sawmill complex in El Dorado.
According to a news release from the company, Conifex Timber Inc. “has received syndication lenders take-up for a new $130 million secured revolving credit facility being arranged by a major U.S. bank to fund the modernization and restart of its sawmill complex in El Dorado, as well as to replace and discharge its existing revolving credit facilities and senior notes.”
The credit facility will have a term of five years and be secured by substantially all of Conifex’s assets (other than its bioenergy segment assets) and is scheduled to close on or about Jan. 6, according to the news release.
Conifex had previously announced that it was working towards finalizing capital and financing plans to reconstruct its currently idled sawmill complex in El Dorado.
“This financing is a key element of our planned expansion into the U.S. South to achieve revenue diversification and reduce cash flow volatility in our lumber segment,” said Ken Shields, Conifex chairman and chief executive officer.
“The completion of the credit facility is subject to customary conditions, including finalization of definitive credit documentation and there can be no assurance that it will be completed on the terms currently contemplated, if at all,” he said.
In 2015, Conifex Timber Inc. announced that it had purchased the outstanding shares and shareholder loans of a private Delaware company, AcquisitionCo.
According to the website Marketwatch.com, “the consideration consisted of 100,000 common shares of the company at a deemed price of CAD $6.75, as well as the reimbursement of certain costs previously incurred by the vendor.”
AcquisitionCo had the exclusive rights to acquire a sawmill and related facilities and equipment, including approximately 186 acres of land, located near El Dorado. Concurrent with the closing of the Purchase, AcquisitionCo exercised its right to acquire the El Dorado Mill for total consideration of US $21 million, comprised of US $12.36 million in cash and an US $8.64 million vendor mortgage.
The El Dorado Mill is situated in an area well regarded for its availability of high quality sawlogs within cost effective proximity and a skilled labor pool, according to the website.
Conifex and its subsidiaries’ primary business currently includes timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips and value added lumber finishing and distribution.
Conifex’s lumber products are sold in the United States, Chinese, Canadian and Japanese markets. Conifex has expanded its operations to include bioenergy production following the commencement of commercial operations of its power generation facility in Mackenzie, B.C., Canada.