Conifex Timber Inc. has completed its previously announced $130 million secured revolving credit facility with a syndicate of institutional lenders arranged and led by Wells Fargo Capital Finance Corporation Canada.
The credit facility is available for a term of 5 years and is secured by substantially all of Conifex's assets (other than its bioenergy segment assets). The credit facility will bear interest at CDOR or LIBOR plus a margin of between 2.5% and 3%, depending upon Conifex's leverage ratio.
Conifex intends to utilize the credit acility to modernize and re-start its currently idled sawmill complex in El Dorado, Arkansas (the "Project"). The Project involves significant capital upgrades, and is designed to maximize both log recovery and lumber grade yield and quality. Upon completion, the El Dorado mill is expected to have approximately 180 million board feet of annual lumber capacity on a two-shift basis. Conifex expects to promptly commence the Project, which it expects to complete by or about the end of the 3Q or early in the 4Q of this year.
Conifex currently estimates that the Project will require capital expenditures of approximately $50 million, consisting of approximately U27 million for equipment and materials, $16 million in subcontract costs and $7 million for indirect costs, including engineering, construction management, freight and project contingency.
A portion of the Facility is also being used to repay in full Conifex's existing revolving credit facilities and senior notes.
Conifex Timber Inc. and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips, and value added lumber finishing and distribution.
