Ainsworth Lumber Co Ltd has received the backing it needs from financial creditors and shareholders to carry out a recapitalisation programme that will see it reduce its debt burden and enhance liquidity.
Ainsworth is to transfer C$823.5m in unsecured notes for equity while generating C$150m in new unsecured notes, as part of a drive to help it adapt to the challenging OSB market driven by the weak US housing sector.
Around 92% of common shareholders have entered an agreement to proceed with the recapitalisation, exceeding the two-thirds needed, with all of the company’s creditors agreeing to the plan.
The recapitalisation will now take place by July 30 in line with the Canadian Business Corporations Act.
