Ainsworth Lumber completes private offering of US$350M in 7.5% senior secured notes due 2017, files short form prospectus for planned rights offering of 140 million shares
VANCOUVER, British Columbia
November 27, 2012
– Ainsworth Lumber Co. Ltd. (TSX:ANS)(TSX:ANS.WT) ("Ainsworth" or the "Company") today announced the completion of its previously announced private placement of US$350 million aggregate principal amount of 7.5% senior secured notes due 2017 (the "New Note Offering"). The Company also announced that it has filed a final short form prospectus (the "Prospectus") with the securities regulatory authorities in each of the provinces of Canada in respect of its previously announced fully backstopped rights offering (the "Rights Offering"). Ainsworth expects to raise gross proceeds of $175 million through the issue of 140 million Common Shares. The Rights Offering represents the last step in the comprehensive refinancing plan originally announced by Ainsworth on October 22, 2012.
Pursuant to the Rights Offering, Ainsworth is distributing to the holders of its outstanding common shares (the "Common Shares") of record at the close of business (Toronto time) on November 22, 2012 (the "Record Date") one right ("Right") for each Common Share held on the Record Date. For each Right held, the holder thereof is entitled to purchase 1.388422 Common Shares (the "Basic Subscription Privilege") at a price of $1.25 per Common Share prior to 4:00 p.m. (Toronto time) on December 21, 2012 (the "Expiry Date"). Holders who exercise in full the Basic Subscription Privilege for their Rights are also entitled to subscribe for additional Common Shares, if available, pursuant to an additional subscription privilege.
The Prospectus along with the Rights certificates will be mailed to eligible Ainsworth shareholders on or about November 30, 2012. The Rights as well as the Common Shares issuable upon the exercise of the Rights are not being distributed or offered to shareholders in any jurisdiction other than the provinces of Canada and, except under the circumstances described in the Prospectus, Rights may not be exercised by or on behalf of a shareholder resident in a jurisdiction other than a province of Canada. The period for exercising Rights will commence on November 30, 2012 and end on the Expiry Date. Rights not exercised before 4:00 p.m. (Toronto time) on the Expiry Date will be void and of no value. The Rights Offering is expected to close on or about December 27, 2012.
In connection with the Rights Offering, Ainsworth entered into an amended and restated standby purchase agreement on November 1, 2012 (the "Standby Purchase Agreement") with Brookfield Asset Management Inc. ("Brookfield"). Funds managed by Brookfield and its affiliates currently hold approximately 55.0% of the outstanding Common Shares. Pursuant to the Standby Purchase Agreement, Brookfield has agreed to purchase all of the Common Shares offered under the Rights Offering that are not otherwise purchased under the Rights Offering on the terms and conditions set out in the Standby Purchase Agreement.
The completion of the Rights Offering was initially conditional on the completion of a separate debt financing by the Company for gross proceeds of at least US$350 million on terms and conditions satisfactory to the Company. Following completion of the New Note Offering, the Rights Offering is no longer conditional upon completion of a debt financing. Since the Rights Offering was initially conditional on the completion of a debt financing, the Toronto Stock Exchange (the "TSX") previously advised the Company that due bills were to be used in connection with the Rights Offering such that ex-rights trading of the Common Shares would only commence when the Rights begin trading. The Common Shares have been trading on the TSX with due bills attached since November 20, 2012 and will continue trading with due bills attached until the Rights commence trading on the TSX on December 3, 2012 under the symbol "ANS.RT". Trading of the Rights will continue until 12:00 p.m. (Toronto time) on the Expiry Date.
Further details regarding the Rights Offering are available in the Prospectus, which was filed today under Ainsworth's profile on SEDAR at www.sedar.com. The information in the Prospectus is not intended to be, nor should it be construed to be, legal or tax advice. Shareholders should consult their own tax advisors about the specific tax consequences of acquiring, holding and disposing of Rights or Common Shares and should consult the Prospectus and their financial advisors to determine their rights and entitlements under the Rights Offering. This press release should be read together with, and is qualified in its entirety by, the more detailed information contained in the Prospectus.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Ainsworth. Nor is it an offer to sell securities or a solicitation of an offer to buy securities in any state or jurisdiction where prohibited by law. No securities referred to herein have been or will be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
Cautionary Statement Regarding Forward-Looking Information
Forward-looking information provided in this news release relating to Ainsworth's expectations regarding the Rights Offering and Ainsworth's future prospects and financial position are forward-looking information pursuant to National Instrument 51-102 promulgated by the Canadian Securities Administrators. Ainsworth 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 Ainsworth'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. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking information include, without limitation, factors detailed from time to time in Ainsworth's periodic reports filed with the Canadian Securities Administrators and other regulatory authorities. The forward-looking information is made as of the date of this news release and Ainsworth assumes no obligation to update or revise them to reflect new events or circumstances, except as explicitly required by securities laws.