TimberWest completes C$50 million rights offering, C$100 million private placement and bank credit amendments

Date Closed: 2/11/2009

Value: C$150 million

On February 11, 2009, TimberWest Forest Corp. (TimberWest) completed a rights offering (the Rights Offering) pursuant to which TimberWest distributed rights (Rights) entitling existing holders of its Stapled Units to purchase up to $50 million aggregate principal amount of 9% convertible debentures of TimberWest (Debentures). TimberWest issued the maximum amount of $50 million aggregate principal amount of Debentures under the Rights Offering, which was oversubscribed by 53.2%. Genuity Capital Markets acted as lead dealer manager in connection with the Rights Offering and BMO Nesbitt Burns Inc. and Raymond James Ltd. acted as co-dealer managers (collectively, the Dealer Managers).

On February 11, 2009, TimberWest also completed a private placement (the Private Placement) of convertible debentures of TimberWest (Private Debentures) having economic terms similar to those of the Debentures. The Private Debentures were issued to two wholly-owned subsidiaries of an institutional investor (the Private Placement Investors). Under the terms of the investment agreement between TimberWest and the Private Placement Investors, the Private Placement Investors agreed to purchase $100 million aggregate principal amount of Private Debentures plus an additional amount of Private Debentures equal to the aggregate principal amount of the Debentures not subscribed for under the Rights Offering. Because the Rights Offering was oversubscribed, no additional Private Debentures were purchased by the Private Placement Investors, leaving their total subscription for Private Debentures at $100 million. RBC Capital Markets acted as financial advisors to the Private Placement Investors.

The Dealer Managers were represented by BLG, with a team that included Paul Mingay, Manoj Pundit, Dyana McLellan and Andrew Bunston (corporate/securities), Larissa Tkachenko (tax) and Bob Owen (forest industry).