Doman completes restructuring, emerges as Western Forest Products

New York, July 27 - Doman Industries Ltd. said it completed its debt restructuring and emerged as Western Forest Products Inc.

The transactions were completed Tuesday and the stay of proceedings under the Companies' Creditors Arrangement Act will be lifted at 11:59 p.m. on July 28.

Western Forest Products is the successor to Doman.

Creditors of Doman and standby purchasers received 25.64 million common shares of the new company and $221 million principal amount of secured bonds, issued at a price of US$950 per US$1,000.

Unsecured noteholders and trade creditors received 19.23 million common shares. In addition, 2.89 million shares and US$99.657 million principal amount of secured bonds were issued on exercise of class A and B warrants distributed to the unsecured noteholders and trade creditors. More than 90% of the warrants were exercised.

Standby purchasers bought 3.51 million common shares and US$121.343 million principal amount of secured bonds under their commitment and a concurrent private placement.

Proceeds from the warrants, the standby commitment and the private placement were used to repay US$160 million of 12% series A and series B secured notes and related costs and to fund exit costs.

Shareholders of Doman received class C warrants although those who owned fewer than 67 shares will receive nothing since fractions were rounded down. Each class C warrant entitles the holder to purchase one common share of Western Forest and has a five year term. Holders of class A and B shares of Doman are entitled to receive 45% of the class C warrants while holders of the class A preferred shares of Doman will receive 55% of the class C warrants. The class C warrants are in three tranches for 569,000, 854,000 and 1.424 million common shares at exercise prices of C$16.28, C$26.03 and C$33.83 respectively.

Trading in the new stock is expected to begin on the Toronto Stock Exchange on Aug. 3 under the symbol "WEF".

Western Forest entered into a C$100 million credit agreement with CIT Business Credit Canada Inc. to provide working capital and replace Doman's existing working capital facility.

Doman, a Duncan, B.C.-based lumber and pulp company, filed for bankruptcy on Nov. 7, 2002.

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