Loss-making international tropical timber producer and supplier Precious Woods is continuing with “far-reaching” restructuring in a bid to achieve a break-even position as quickly as possible.
The company, which supplies Brazilian and African sawn timber and veneers through subsidiaries in Holland and Europe, said it had secured two new loans from shareholders totaling CHF7m to improve the liquidity of the group.
It also wants to raise new capital through the issue of new shares, though is restricted at the moment by regulations because Precious Woods’ current share price – CHF30 – is below the CHF50 nominal share value.
“Therefore, the nominal value must be reduced enough to a level below the stock market price,” it said. “In that way, the company’s ability to access the capital market will be ensured.”
The board of directors will call an extraordinary general meeting to allow for discussion and a vote on the reduction in nominal value.
In September last year, Precious Woods reported a US$8.9m operating loss for the first half of the year. Gabon’s log export ban and delayed harvest permits in Brazil have negatively impacted financial results.
The company is investing in a new sawmill in Bambidie in Gabon for the processing of valuable hardwoods – a direct reaction to the log export ban.
