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Gold/Mining/Energy : Sino-Forest (TSE: TRE.A) A STOCK FOR THE FUTURE!! -- Ignore unavailable to you. Want to Upgrade?

To: M. Merriam who wrote (184)	6/9/1999 9:30:00 AM
From: mick	Read Replies (1) \| Respond to of 265

I am not sure we are reading the same article, so here it is below with passages hilighted. To me, it says the loan is at 5 % unless they have a problem with the stock price, then it goes to 15 %. The notes are exchangeable at a price of $ 1.72 - I think the stock will be worth a lot more. Cheers TORONTO, ONTARIO-- Sino-Forest Corporation ("Sino-Forest" or the "Company") announces that its wholly-owned subsidiary, Sino-Wood Partners, Limited ("Sino-Wood"), has entered into an Agreement to issue an aggregate of US$20.0 million Guaranteed Exchangeable Redeemable Notes ("the "Notes") to Capital Future Inc. ("CFI"). CFI is a wholly-owned subsidiary of GEMS Oriental and General Fund Limited ("GEMS"), a direct investment fund in the Asia Pacific region that was founded by Simon Murray. The transaction is subject to delivery of closing documents, which is expected to be completed prior to January 31, 1999. Approximately US$11.0 million of the net proceeds will be used as working capital for the purchase of standing timber in the People's Republic of China and the remainder of the net proceeds will be used for further establishment, development and expansion of the timber trading business. The Notes are for a period of five years and may be redeemed by GEMS after three years. The Notes bear interest at the rate of 5% per annum and are payable half yearly in arrears. The Notes Agreement provides that from January 15, 2000 until January 15, 2002, the Notes are exchangeable in minimum amounts of US$1.0 million into Class A Subordinate-Voting Shares ("Class A Shares") of Sino-Forest at an exchangeable price of US$1.13 (Cdn$1.72). The exchange price is subject to an adjustment after January 15, 2002 by a factor of 1.093. Sino-Wood is entitled, at any time after the first anniversary and prior to the third anniversary of the date of issue of the Notes, to require the Noteholders to exchange no more than US$10 million of the Notes into Class A Shares provided that the weighted average price per share on the Toronto Stock Exchange for the 60 trading days and the 7 trading days immediately preceding the date of such exchange shall both exceed 2.0 times the Exchange Price then in effect. The Notes Agreement also provides that if the outstanding Notes are not exchanged into Class A Shares of Sino-Forest on the maturity date, interest on the Notes for the five-year period will be calculated at the rate of 15% per annum compounded less any interest paid on the Notes. The Notes are unsecured and are issued with the benefit of an unconditional and irrevocable guarantee by Sino-Forest and Sino-Wood. Under the terms of the Agreement, the Noteholders shall have the rights to nominate a person to be appointed to the board of directors of Sino-Forest and Sino-Wood so long as the Notes are outstanding or the Noteholders in aggregate own more than 7.5% of Sino-Forest. It is proposed that Simon Murray, the founder and Chairman of GEMS, be nominated for appointment as a director of the Company. Simon Murray was the Executive Chairman of Asia Pacific for the Deutsche Bank Group with responsibilities for supervision of the Bank's operations in the region comprising 60 businesses in 17 countries from 1993 to 1998. He is currently a Director of a number of companies including Hutchison Whampoa Ltd., Cheung Kong Holdings and Tommy Hilfiger in the USA. Hutchison Whampoa Ltd. and Cheung Kong Holdings are public companies listed in Hong Kong, controlled by Li Ka-Shing. Simon Murray has spent 32 years in Asia including 14 years with Jardine Matheson. He had his own project finance business for some years which was a joint venture with NM Rothschild before becoming the Group Managing Director of Hutchison Whampoa in 1984 where he spent 9 years before joining Deutsche Bank. His past Chairmanships include Hong Kong Electric, Hong Kong International Terminals, Husky Oil of Canada and Asia Satellite Telecommunications. He has first-hand experience in many different businesses in Asia and has gained unique knowledge of the region over the years. Sino-Forest through its subsidiaries and joint ventures operates an integrated forest products company that has the rights to manage and operate approximately 603,000 hectares of plantations in southern China for up to 50 years. The Company's plantation operations include timber harvesting, replanting, maintenance, wood chip processing and marketing and export operations. The plantations, when fully phased-in, will allow the Company to produce an annual sustainable yield of over 5 million BDMT of saleable wood chips from its eucalyptus, aspen and pine trees. The Class A Subordinate-Voting Shares of the Company trade on The Toronto Stock Exchange under the symbol "TRE.A". For further information, contact: