Conifex Timber completed a $25 million secured term loan with PenderFund Capital Management, an independent investment firm located in Vancouver, British Columbia. A portion of the term loan was utilized to repay and retire Conifex’s existing lumber segment credit facility with Wells Fargo Capital Finance Canada in the amount of approximately $11 million. The balance of the term loan will be available for working capital and general corporate purposes._x000D_
_x000D_
“On behalf of the entire Conifex team, we are delighted with the show of support PenderFund provided,” Ken Shields, CEO and chairman of Conifex, said. “They studied our business structure and objectives and provided us a tailored financing solution that provides our management team significant flexibility to strengthen our operations in Mackenzie and paves the way for improved operating results.”_x000D_
_x000D_
“We understand that British Columbia’s forestry sector is currently facing challenges on several fronts; however, we are optimistic about the long-term value of Conifex’s business,” Geoff Castle, lead portfolio manager, fixed income at PenderFund, said. “Amongst other strengths, Conifex enjoys excellent access to timber supply and possesses an important diversifying income stream from its power generation assets.”_x000D_
_x000D_
The term loan has a term of 5 years, bears interest of 14% per annum and is substantially secured by Conifex’s lumber segment assets. Conifex has also agreed to issue 3.6 million common share purchase warrants to Pender having a 5-year term. Each warrant is exercisable into one common share for $0.75. Pursuant to applicable securities laws, the warrants are subject to a hold period of four months and one day from issuance._x000D_
_x000D_
Having completed the term loan, Conifex is now evaluating opportunities to secure a working capital facility to further help ensure sufficient liquidity to sustain operations through a period of below normal lumber prices. Across its lumber and power operations, Conifex’s total long-term debt, including the PenderFund Term Loan, is approximately $75.3 million having a weighted average interest rate of 9.29%._x000D_
_x000D_
Conifex was advised by Raymond James.
Forward for Specialty Finance
