North American integrated forest products company Tembec says it has gained additional support for its plan to slash US$1.2bn of debt.
The company, which employs about 8,000 people in 50 manufacturing facilities in North America and France, has secured support from the Communications, Energy and Paperworkers Union of Canada for its recapitalisation plan to convert the debt into new equity. Noteholders holding US$774m of notes have so far signalled their support for the plan.
The plan, expected to be implemented by the end of February, also proposes a new four-year loan of up to US$300m to provide additional liquidity.
Tembec said the new capital structure would provide a stronger financial base for the company’s strategies and improve the long-term value of the business.
The company has been struggling financially in recent times, recording a net loss of US$49m in fiscal 2007, an improvement on the US$292m loss in 2006.
The US$2.8bn turnover company’s wood products division produces softwood, hardwood, hardwood flooring, I-joists, LVL and finger jointed timber.
