Canfor Writing Down Assets

Wednesday, January 09, 2008 04:01 AM

Prince George, B.C. - Canfor has announced it will be writing down the carrying value of some of its long lived assets. The company says that in view of the ongoing operating losses and expected market conditions including exchange rates going forward, a review of the carrying value of all assets was undertaken.

Where the carrying value of assets is not expected to be recoverable from future cash flows, they are written down to fair value. As a result Canfor expects its fourth quarter results to include a pre-tax impairment charge of approximately $256 million related to its long-lived assets and other assets. Of that amount, approximately $90 million relates to the lumber segment, $141 million to the panels segment and $25 million to corporate and other segments.

This impairment charge is based on current estimates and is subject to change.

Canfor’s fourth quarter and fiscal 2007 results are expected to be released on February 22, 2008.

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Posted on Wednesday, January 09, 2008 04:01 AM in News by 250 News

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Comments

Posted by: szd on January 9 2008 7:51 AM

Apparently Canfor is going to be indefinitely closing the Pas. Logging contractors have been told to stop logging as they only need 2 months of logs.

Posted by: YamaDooPolCat on January 9 2008 7:53 AM

OK...

Posted by: gitterdun on January 9 2008 8:46 AM

the Pas is Winton Global, not Canfor. Winton Global has instructed all their contractors to finish the blocks they are currently logging. Then the loggers are shut down until........?

Posted by: Palopu on January 9 2008 12:42 PM

Canfor owns one third of the Pas Lumber, picked it up a number of years ago for $12 Million I beleive. May own more by now who knows???

Posted by: gitterdun on January 9 2008 3:45 PM

I think Canfor still owns one third of Winton Global and Lakeland and Sinclair Enterprises is majority shareholder of both.

Posted by: Eagleone on January 9 2008 5:20 PM

I wonder who the unsecured creditors for Canfor would be?

Anytime you have a huge write down you have to wonder who is unsecured, because it is then the next step to just say 'bankruptcy reorganization' of the business model in light of cash flow situations (highly likely next step) and in one or two easy steps eliminate all that cumbersome debt that was used to modernize the company (and those pesky investors, bond holders, and trade creditors who financed that growth).

Shareholders will be left with nothing if that happens and you can bet the secured creditors will be the hedge funds and the Chase Manhattan types that make their trillions by using the bankruptcy laws to fleece the unsecured out of their assets through secured investor loyal management teams that are rewarded handsomely for their efforts. It�s the way it always works especially through the BC courts. IMO the modern day corporate structure is completely broken in favour of the banksters (who are now moving in for the kill).

If I was a private contractor for Canfor saw mills I would be very careful around now about trade debts. If I was a shareholder I would sell and buy back in better times. If I was an employee I would work a little harder and hope for the best.

Emerson was a genius with his income trust idea for the pulp mills (not good for this region though as a whole), because now they can let the unprofitable sawmills go sideways or worse and they still make their record profits through the pulp side. I'm sure they could care less who the eventual equity holders of the saw mill side will be as long as the wood chips keep coming. His softwood agreement with the Americans most likely factored all of this into account.

Time Will Tell

Posted by: northman on January 9 2008 7:38 PM

The next Richie Bro's auction should be a good one with all these dying forest companies.