Sino-Forest accepts China Development Bank Corporation term loan offer of $50 million to fund planting plan

Mar 24, 2011. /Lesprom Network/. Sino-Forest Corporation announced that its wholly-owned subsidiary, Sino-Panel (China) Investments Limited ("Sino-Panel"), has officially accepted a 15- year term loan facility offered by the China Development Bank Corporation Guangdong Branch ("CDB"), pursuant to which CDB will provide a RMB350 million ($50 million) loan facility to Sino-Panel. The $50 million, 15-year term loan facility will be used for land lease pre-payments to fund Sino-Forest's long-term planting program. The loan will be based on the PRC market floating interest rate, which is currently 6.6% per annum for a period of five years or longer. Sino-Forest will draw down funds in tranches over a five-year period. As this loan is from a PRC policy bank to a company in China's forestry sector, Sino-Forest expects to receive an interest rate subsidy of approximately 2% per annum subject to approval. In July 2010, Sino-Panel signed a Co-operative Framework Agreement with CDB that would allow project financing of up to RMB10 billion ($1.5 billion) to support Sino-Forest and its subsidiaries' operations, including Greenheart Group, domestically and internationally. Furthermore, in the 3Q 2010, Sino-Forest announced plans to plant 200,000 hectares by 2012 with its scientifically advanced seedlings. The Facility will partially fund the company's planting program. Sino-Forest Chairman and CEO Allen Chan said, "We are very pleased to commence our first cooperation with CDB, an important financing partner as its strategy aligns with Sino-Forest's replanting and regional development plan. The signing of the CDB framework agreement has opened many doors for potential onshore Renminbi financing for Sino-Forest and we appreciate the cost-competitive interest rates and extended terms offered by Chinese domestic financial institutions." Sino-Forest Corporation is a leading commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products.