Vancouver: Ainsworth Lumber Co. Ltd. is exploring strategic alternatives to strengthen its balance sheet and enhance liquidity, CEO Brian Ainsworth said after shares in the company gained more than 40 per cent.
The company posted a loss of $216.5 million in 2007, double the 2006 loss of $108 million, as annual sales plunged to $544.2 million from $836 million.
In March, the company failed in a bid to refinance US$823.5 million worth of corporate debt by exchanging a series of older unsecured bonds with new secured ones.
Ainsworth announced in mid February it had begun an offer to exchange several series of unsecured bonds that expired between 2010 and 2014 for new secured bonds that would expire in June 2014.
The offer was conditional on 50.1% of bondholders tendering their securities.
The proposed refinancing was meant to lower the company’s debt costs at a time when the North American forestry sector is facing tough times because of the slump in the US housing market.
Ainsworth has announced production cuts at its oriented strand board mills in Grande Prairie, Alta. and 100 Mile House, BC, due to reduced customer demand for the popular plywood substitute from US homebuilders.
© 2008 The Canadian Press