Russian forest products group RusForest’s new share issue has been oversubscribed, giving the company a much-needed SKr452m cash injection.
RusForest, which operates four sawmills, announced the rights issue in February in the face of weak market conditions and delays in machinery installation.
Following the rights issue, the number of RusForest shares has increased by 383.2 million to 479 million. Subscriptions corresponding to 137.1% of the rights issue have been received.
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.
Rusforest recently posted an annual net loss of SKr288.7m (2010: SKr-130.2m).
