Sino-Forest Corporation announced recently that it has entered into a Share Subscription Agreement with Omnicorp Limited, a Hong Kong-listed company. Sino-Forest will, subject to the satisfaction or waiver of certain conditions, purchase a total of 230 million subscription shares in Omnicorp at a price of HK$1.82 per share, for a consideration of HK$418.6 million or approximately US$53.7 million. Upon completion of the
Agreement, Sino-Forest will increase its voting interest in Omnicorp from 19.9% to approximately 53.7% of the enlarged issued share capital of Omnicorp. Sino-Forest also holds HK$212.3 million of existing convertible bonds of Omnicorp that were acquired in November 2007 and February 2009. Assuming full conversion of the Existing Convertible Bonds and the completion of the Agreement, Sino-Forest will own approximately 60.1% of the enlarged issued share capital of Omnicorp.
Omnicorp has a 60.4% ownership in Greenheart Resources Holdings Limited and Sino-Forest, through its wholly owned subsidiary Sino-Capital Global Inc., owns a 39.6% minority stake. As one of the largest forest concession owners and operators in Suriname, South America, Greenheart owns a 178,000-hectare hardwood concession with a harvestable standing stock volume of approximately 4.4 million cubic meters. Greenheart adheres to the sustainable forestry management and silviculture systems developed and practiced by the Suriname Government through CELOS, the Centre for Agricultural Research in Suriname.
Sino-Forest Chairman & CEO Allen Chan said, "We are pleased to expand our existing partnership with Omnicorp and look forward to sharing our operating expertise and R&D knowledge in sustainable forestry management with Greenheart. This collaboration will strengthen our supply of sustainable hardwood fibre at competitive prices to serve the increasing wood deficit in China and in turn deliver stronger shareholder value for Sino-Forest.
At the same time, through low impact sustainable harvesting and continued adoption of CELOS best practices, we will endeavor to preserve and enhance Suriname’s precious ecosystem." Mr. Chan continued, "Our partnership with Omnicorp will also support economic growth in Suriname by further developing the domestic sustainable forestry industry. We intend to expand the export markets for Suriname’s sustainable wood products in China and other countries around the world, improve the infrastructure and services in local communities and provide greater employment opportunities for the Suriname people."
