Tembec to Sell 49,500 Hectares of Land in British Columbia

Tembec, Montreal, Que., Canada, has agreed to sell approximately 49,500 hectares of land within the Regional District of East Kootenay, British Columbia, to Jemi Fibre Corp. for $35 million. The transaction includes a seven-year earn-out provision pursuant to which Tembec would be entitled to additional payments of at least $2.1 million.

The sale is expected to close in two phases: the closing of the first phase in connection with the sale of approximately 17,700 hectares for a price of $15 million is expected to occur this June, and the closing of the second phase in connection with the sale of approximately 31,800 hectares for a price of $20 million is expected to occur in September. The closing of both phases of the transaction is subject to Jemi obtaining adequate financing and other customary conditions.

The transaction is part of the previously announced BC Land Sale Initiative. The company has set an objective of realizing up to $75 million in land sales by this December. To date, the company has realized a total of $23.2 million. Assuming that the aforementioned transactions close as contemplated, total land sales will have reached $60.3 million, including the $2.1 million of deferred payments.

The company owns an additional 7,433 hectares of land in British Columbia for which it actively continues to solicit potential buyers. Based on transactions to date, the company is reducing its objective and now expects to realize up to $70 million in land sales by this December.

TAPPI
http://www.tappi.org/