The Transaction includes a 7 year earn-out provision pursuant to which Tembec would be entitled to additional payments of at least $2.1 million. The sale is expected to close in two phases: the closing of the first phase in connection with the sale of approximately 17,700 hectares for a price of $15 million is expected to occur in June 2014 and the closing of the second phase in connection with the sale of approximately 31,800 hectares for a price of $20 million is expected to occur in September 2014.
The closing of both phases of the Transaction is subject to Jemi obtaining adequate financing and other customary conditions. There can be no assurance that the Transaction will be consummated in whole or in part.
The Transaction is part of the previously announced BC Land Sale Initiative. The Company has set an objective of realizing up to $75 million in land sales by December 2014. To date, the Company has realized a total of $23.2 million. Assuming that the aforementioned transactions close as contemplated, total land sales will have reached $60.3 million, including the $2.1 million of deferred payments. The Company owns a further 7,433 hectares of lands in British Columbia for which it actively continues to solicit potential buyers. Based on transactions to date, the Company is reducing its objective and now expects to realize up to $70 million in land sales by December 2014. There can be no assurance that the Company will attain the stated objective or that it will do so within the specified time period.
Tembec is a manufacturer of forest products - lumber, pulp, paper and specialty cellulose - and a global leader in sustainable forest management practices.
