TORONTO -- Sino-Forest Corporation ("Sino-Forest"), a leading commercial forest plantation operator in China, is pleased to announce that its indirect wholly-owned subsidiary, Sino-Panel (China) Investments Limited ("Sino-Panel"), has entered into a Co-operative Framework Agreement with the China Development Bank Corporation Guangdong Branch ("CDB"), a financial institution set up by the People's Republic of China State Council in 1994 for the purposes of fostering economic development in various industries throughout China.
Pursuant to the terms of the agreement, CDB could provide project financing of up to 10 billion RMB (US$1.5 billion) to support Sino-Panel's projects in China. CDB will also be given the opportunity to act as financial consultant with respect to Sino-Panel's PRC domestic development projects. While Sino-Panel will give priority consideration to utilize various term loan facilities to be provided by CDB, it will continue to have the right to accept financial services from other financial institutions and lenders. Any debt financing provided by CDB would be subject to loan agreements entered into by the parties on mutually agreeable terms.
Sino-Forest Chairman and CEO Allen Chan said, "We are very pleased to enter into this Co-operative Framework Agreement with CDB; it represents an important milestone for Sino-Forest in terms of accessing long-term capital in China and establishing strategic business arrangements with a Chinese policy bank that represents Central Government policy directives. CDB is a very significant domestic source of capital and can become an important strategic financing partner in our future growth plans both domestically and internationally."
Dave Horsley, Sino-Forest's Senior Vice President & Chief Financial Officer, added, "The exchange and extension of our US$212 million guaranteed senior notes last year was supported by our fixed-income investors as Sino-Forest can take advantage of cost-competitive interest rates offered by Chinese domestic financial institutions. Although we have no immediate need for financing at this time and Sino-Forest has a conservatively low debt-to-equity ratio of 0.41 to 1, we are establishing a new banking arrangement that could allow us to better control our long-term cost of capital and maximize value for our shareholders."
About Sino-Forest Corporation
Sino-Forest Corporation is a leading commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation trees, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest's common shares have traded on the Toronto Stock Exchange under the symbol TRE since 1995.
Source: Sino-Forest Corp., www.sinoforest.com
Pursuant to the terms of the agreement, CDB could provide project financing of up to 10 billion RMB (US$1.5 billion) to support Sino-Panel's projects in China. CDB will also be given the opportunity to act as financial consultant with respect to Sino-Panel's PRC domestic development projects. While Sino-Panel will give priority consideration to utilize various term loan facilities to be provided by CDB, it will continue to have the right to accept financial services from other financial institutions and lenders. Any debt financing provided by CDB would be subject to loan agreements entered into by the parties on mutually agreeable terms.
Sino-Forest Chairman and CEO Allen Chan said, "We are very pleased to enter into this Co-operative Framework Agreement with CDB; it represents an important milestone for Sino-Forest in terms of accessing long-term capital in China and establishing strategic business arrangements with a Chinese policy bank that represents Central Government policy directives. CDB is a very significant domestic source of capital and can become an important strategic financing partner in our future growth plans both domestically and internationally."
Dave Horsley, Sino-Forest's Senior Vice President & Chief Financial Officer, added, "The exchange and extension of our US$212 million guaranteed senior notes last year was supported by our fixed-income investors as Sino-Forest can take advantage of cost-competitive interest rates offered by Chinese domestic financial institutions. Although we have no immediate need for financing at this time and Sino-Forest has a conservatively low debt-to-equity ratio of 0.41 to 1, we are establishing a new banking arrangement that could allow us to better control our long-term cost of capital and maximize value for our shareholders."
About Sino-Forest Corporation
Sino-Forest Corporation is a leading commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation trees, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest's common shares have traded on the Toronto Stock Exchange under the symbol TRE since 1995.
Source: Sino-Forest Corp., www.sinoforest.com
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