A financial rescue package for Canadian lumber giant Doman Industries has been greeted as good news for the whole of British Columbia’s coastal forest industry.
The Coastal Forest and Lumber Association said, had Doman gone bankrupt and stopped operations, the supply of timber from the province could have become a concern and thrown the market into chaos. But the company’s survival showed it was “business as ususal”.
Doman, the second largest forest licensee in British Columbia with 4 million m3 of timber harvested a year, has agreed a deal with bondholders in which it will swap debt for equity. Its C$1bn debt will be slashed by C$600m and majority ownership transferred from founder Herb Doman to a bondholder group.
The deal involves C$100m in new money to finance operations and future growth.
