Nov 14, 2008. /Lesprom.com/. TimberWest Forest Corp. announced sweeping changes to its structure and a temporary end of payments to its unit holders in response to deteriorating log-market conditions. Besides deferring distributions to unit holders effective Jan. 1, the forest company intends to lay off 10% of its staff, continue to cut back on logging and seek unit holder approval to lower interest payments on the debt portion of its stapled units. TimberWest said it also intends to initiate talks with its lenders to modify debt terms, as it does not expect to be in compliance with debt covenants by the end of the 4Q. In announcing the changes, TimberWest President Paul McElligott described the company as facing "very challenging business conditions." TimberWest announced a loss of $6.3 million in distributable cash, or $0.08 a unit compared with a loss of $5.6 million, or $0.07 a unit, in the 3Q 2007. The year-to-date loss is $13.4 million or $0.17 a unit. The results include one-time costs mostly associated with restructuring charges, which the company said have resulted in lower costs. Logging costs, for example, are down to $66 a cubic metre from $70 a year ago despite the fact that harvest volumes are down. The employee reductions amount to about 10 workers, as TimberWest has already contracted out all of its logging. The company described log markets as flat in the quarter with the exception of Japan, which has been diversifying its log imports due to a tightening of the Russian log supply. Timberwest owns extensive private timberlands in coastal British Columbia. It ended the quarter with $234.4 million in debt and $17.3 million in letters of credit.