Toronto, Canada, USA, 23 March 2011 -- Sino-Forest Corporation (TSX: TRE), a leading commercial forest plantation operator in China, today announced that its wholly-owned subsidiary, Sino-Panel (China) Investments Limited, has accepted a 15-year term loan facility offered by the China Development Bank Corporation (CDB) Guangdong Branch, pursuant to which CDB will provide a RMB 350 million (approximately USD 50 million) loan facility to Sino-Panel. The facility will be used for land lease prepayments to fund Sino-Forest’s long-term planting program.
The loan will be based on the PRC market floating interest rate, which is currently 6.6% per annum for a period of five years or longer. Sino-Forest will draw down funds in tranches over a five-year period. As this loan is from a PRC policy bank to a company in China’s forestry sector, Sino-Forest expects to receive an interest rate subsidy of approximately 2% per annum subject to approval.
In July 2010, Sino-Panel signed a cooperative framework agreement with CDB that would allow project financing of up to RMB 10 billion (USD 1.5 billion) to support Sino-Forest and its subsidiaries’ operations, including Greenheart Group, domestically and internationally. Furthermore, in the third quarter of 2010, Sino-Forest announced plans to plant 200,000 hectares by 2012 with its scientifically advanced seedlings. The facility will partially fund the company’s planting program.
The governor of CDB Guangdong Branch, Wu De Li said, “We are very pleased to cooperate with Sino-Forest, and we anticipate this first facility will accelerate and expand our cooperation further, both domestically and internationally, and with its subsidiary.”
CDB is one of the three Chinese policy banks, administered by the PRC’s State Council, with assets of RMB 4.94 trillion (approximately USD 740 billion) as of September 2010. The strategic focuses of CDB are to support China's basic and pillar industries, promote coordination of China's regional development and facilitate the development of China's new rural communities.
Allen Cahn, Sino-Forest chairman and CEO, said, “We are very pleased to commence our first cooperation with CDB, an important financing partner as its strategy aligns with Sino-Forest’s replanting and regional development plan. The signing of the CDB framework agreement has opened many doors for potential onshore renminbi financing for Sino-Forest and we appreciate the cost-competitive interest rates and extended terms offered by Chinese domestic financial institutions.”
Sino-Forest Corporation is a leading commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong Kong-listed investment holding company (HKSE: 00094) with operations based in Suriname, South America, and New Zealand, which is involved in responsible and sustainable log harvesting, lumber processing, and sales and marketing of logs and lumber products to China and other countries around the world. Sino-Forest’s common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Learn more at www.sinoforest.com.