Loss-making Rusforest, which operates five sawmills and has an annual capacity of 400,000m3 of sawn timber, faces a bondholder meeting on January 25 and an extraordinary shareholders’ meeting on February 1 in Stockholm when a vote will be taken on the restructuring plan.
The Swedish-based company has appointed Indufor Oy to conduct an independent liquidation analysis to assist bondholders in whether to support restructuring.
"Should the proposal be rejected, it is the board of directors’ assessment that the company will face an insolvency situation in the first quarter," said RusForest.
"It is clear to the RusForest board of directors and management that the value of RusForest’s assets in case of insolvency is minimal and that bondholders will find it challenging to recover any net proceeds in a bankruptcy process.
RusForest, which operates in Arkhangelsk and eastern Siberia, is expecting to record an asset impairment of SKr500m in its year-end financials to be released in March, while the most recent financials in the third quarter of 2012 show a SKr32m loss before interest, tax, depreciation and amortisation.
It has minimal cash and has been forced to secure a bridging loan. In addition, it has SKr186m of secured debt and SKr500m of unsecured corporate bonds.
