Oct 22, 2012. /Lesprom Network/. Ainsworth Lumber Co. Ltd. announced that its Board of Directors has approved a comprehensive refinancing plan which is expected to result in an approximately 30% reduction in total debt, lower borrowing costs and the extension of the Company's maturity profile. As part of the Refinancing Plan, the Company intends to proceed with a fully backstopped rights offering to raise gross proceeds of $175 million through the issue of common shares (the "Rights Offering") and a debt financing for gross proceeds of approximately $350 million (the "Debt Financing"). The aggregate net proceeds received by Ainsworth from the Rights Offering and the Debt Financing will be used to repay in full Ainsworth's outstanding senior secured term loan due June 2014 and 11% senior unsecured notes due July 2015 which comprise substantially all of the Company''s existing indebtedness. Under the Rights Offering, Ainsworth plans to distribute to shareholders of record in Canada rights ("Rights") to subscribe for additional common shares of Ainsworth. The exercise price per common share under the Rights Offering will be $1.25. In connection with the Rights Offering, Ainsworth also announced that it has entered into a standby purchase agreement (the "Standby Purchase Agreement") with its largest shareholder, Brookfield Asset Management Inc. pursuant to which Brookfield has agreed to purchase all of the common shares offered under the Rights Offering that are not otherwise purchased under the Rights Offering on the terms and conditions set out in the Standby Purchase Agreement. In consideration for its agreement to acquire such common shares, Brookfield will be entitled to a standby fee in the amount of $4.375 million. The completion of the Rights Offering is conditional upon, among other things, the completion of the Debt Financing on terms and conditions satisfactory to Ainsworth. It is expected that the Rights Offering will be launched at or around the date that the Debt Financing is completed. Ainsworth President and COO, Jim Lake said, "I am pleased to announce a refinancing plan that will de-leverage the Company''s balance sheet and position us well across industry cycles. We are also pleased that our major shareholder Brookfield has agreed to support the refinancing plan by backstopping our proposed rights offering." Ainsworth Engineered wood products include oriented strand board (OSB), oriented strand lumber (OSL) and specialty overlaid panels.