Russian forest products group RusForest AB is to carry out a SKr450m rights issue to raise much needed capital in the face of weak market conditions and delays in machinery installation.
RusForest, which operates four sawmills, admitted prevailing market conditions were more challenging than previously anticipated.
The additional capital will be used to finalise ongoing investments in eastern Siberia and the Arkhangelsk region and will enable increases in harvesting capacity, as well as expansion of sawmilling capacity across group operations.
The capital will also provide additional working capital needed as a result of previous losses.
“We are confident that the company is on the right track and that we will reach profitability in a not too distant future,” said RusForest chairman Kenneth Eriksson.
The company has blazed an acquisition trail in recent years.
