Sino-Forest Corp - News Release
Sino-Forest subsidiary enters $20-million (U.S.) loan agreement
Sino-Forest Corp TRE.A
Shares issued 65,942,900 Sep 27 close $1.77
Tue 28 Sept 99 News Release
Mr. Kee Wong reports
Sino-Forest's wholly owned subsidiary, Sino-Wood Partners, Limited has
entered into a loan agreement with DEG - Deutsche Investitions - und
Entwicklungsgesellschaft mbH (DEG) of Koln, Germany, for a long-term loan
of 18,970,701 euros ($20-million (U.S.)). DEG is the German investment and
development company owned by the Federal Republic of Germany for the
promotion of private investment in its partner countries. The transaction
is subject to delivery of closing documents which is expected to be
completed prior to Oct. 4, 1999. The loan will be disbursed in two
instalments. The first disbursement in an amount of nine million euros will
be made in October, 1999, and the second disbursement in November, 1999.
The proceeds from the loan will be used to finance the phasing-in and
planting of 30,000 hectares of plantation in three of the company's
existing co-operative joint ventures.
The loan is for a period of 10 years. Principal repayment of the loan will
commence on May 15, 2005, in 10 equal half yearly instalments. The loan
bears interest at the six month EUR LIBOR rate plus 3.5 per cent per year
(as at Sept. 27, 1999, the six month EUR LIBOR rate was 3.16526 per cent).
The loan is unsecured and is granted with the benefit of an unconditional
and irrevocable guarantee by Sino-Forest.
"We are pleased to be able to obtain this loan from DEG to further
accelerate the phasing-in of our plantation program," says Allen Chan,
chairman and chief executive officer. "The terms and conditions of the loan
are very attractive and is expected to generate an additional $145-million
(U.S.) of revenue when the trees are matured and harvested based on current
market selling prices," says Mr. Chan.
WARNING: The company relies upon litigation protection for
"forward-looking" statements.
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