Toronto, Quebec, Canada, 03 August 2010 – Sino-Forest Corporation (TSX: TRE), a leading commercial forest plantation operator in China, has completed its purchase of 230 million subscription shares in Hong Kong-listed Omnicorp Limited (HKSE:0094) at a price per share of HKD 1.82 for a consideration of HKD 418.6 million (approximately USD 53.7 million). The share subscription increased Sino-Forest’s voting interest in Omnicorp from approximately 19.8% to approximately 53.5% of the enlarged issued share capital of Omnicorp.
On completion of the share subscription, Allen Chan was appointed chairman and a nonexecutive director of Omnicorp and Judson Martin was appointed president and chief executive officer and an executive director of Omnicorp. Chan co-founded Sino-Forest in 1994; he is the chairman and chief executive officer and a director of Sino-Forest. Martin is the vice chairman of Sino-Forest and has been a director of Sino-Forest since 2006. These appointments to the board of Omnicorp are effective immediately.
Sino-Forest also holds HKD 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, Sino-Forest’s interest will increase to approximately 59.9% 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. Greenheart is one of the largest forest concession owners and operators in Suriname, with a 178,000-hectare hardwood concession and harvesting rights.
“We are pleased to strengthen our partnership with Omnicorp, which will help us secure quality wood fibre for our customers in China," Chan said. "This strategic transaction increases our ownership interest in Greenheart and its hardwood concession in Suriname and represents exciting opportunities for our shareholders. Sustainable harvesting and exporting of processed wood products from Suriname will contribute to the country’s economic development while helping to alleviate China’s domestic wood deficit,” he said.
“Omnicorp will be able to leverage Sino-Forest’s long established distribution network in China and benefit from Sino-Forest’s broad experience to better service our customers in the Chinese market," said Martin. "I look forward to working with Omnicorp’s management teams in Hong Kong and Suriname and to the next stage of Omnicorp’s development.”
About Omnicorp Limited
Omnicorp is a Hong Kong-based investment holding company. The principal activities of Omnicorp’s subsidiaries consist of log harvesting, lumber processing, marketing, and sales of logs and lumber products. Omnicorp’s main subsidiary is Greenheart Resources Holdings Limited. Omnicorp’s common shares have been listed on the Hong Kong Stock Exchange since 1988 under the symbol 0094. Omnicorp is majority-owned by Sino-Forest Corporation, a leading, commercial forest plantation operator in China and listed on the Toronto Stock Exchange (TSX:TRE).
About Sino-Forest Corporation
Sino-Forest is a leading, commercial forest plantation operator in China. Its principal businesses include the ownership and management of forest plantation trees and sales of standing timber, wood logs, and complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Omnicorp (HK:0094), a Hong Kong listed investment holding company with hardwood concessions and harvesting rights in Suriname. Sino-Forest’s common shares have traded on the Toronto Stock Exchange under the symbol TRE since 1995.