Tembec Closes Sale of St. Georges OSB Mill
Feb. 27, 2006 - Tembec Inc. said that it has successfully completed the sale of its oriented strandboard (OSB) business located in Saint-Georges-de-Champlain, Quebec to Jolina Capital for $98 million.
"The terms of the transaction and the ability of Jolina to provide timely closing were key for Tembec. It is a good transaction for both parties," said Tembec President and Chief Executive Officer, James Lopez. "This transaction is consistent with an earlier announced plan aimed at generating between $100 and $150 million of additional liquidity through the monetization of non-core assets and other cash generation initiatives."
Tembec gets $88 million at the closing and the balance is payable in the form of a $10 million interest-bearing note, repayable in equal annual instalments over a five-year period.
As a result of the deal, Tembec will record a gain of $63.5 million in the quarter ending March 25, 2006. The after tax effect will be $47.2 million or $0.55 per share.
SOURCE: Tembec Inc.