Ainsworth Lumber No Longer Under Family's Control

Wednesday, June 18, 2008 02:21 PM

Prince George, B.C. - Another family owned lumber business has been forced into major changes.

Ainsworth Lumber is now into a “re- capitalization” plan which has the former principle shareholders, (members of the Ainsworth family) holding just 4% of the shares and bondholders have the 96% balance of shares.

The agreement will see the Ainsworth family hand over control of their family run business and under the terms of the agreement, many of the managers, will be let go. That means there will be family members who not only lost control of the company, they are also unemployed.

Ainsworth recorded a first quarter net loss of $88 million dollars. The loss blamed in part on the low demand for OSB and the high value of the Canadian dollar. The company recorded a net loss of $22 million in the same quarter of 2007.

News of the “re-capitalization plan” is not meeting approval on the stock market which saw Ainsworth stock drop more than 62% by mid morning trading to $1.08.

Ainsworth has three plants in B.C.: Savona Specialty Plywood, Lillooet Veneer and 100 Mile House OSB. It also has three operations in Alberta, one in Ontario and three in Minnesota.

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Posted on Wednesday, June 18, 2008 02:21 PM in News by 250 News

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Comments

Posted by: sportsman on June 18 2008 5:38 PM

And people wonder why sawmill companies are cutting back or shutting down mills that are loosing money. It's because of the same reasons that Ainsworth is changing hands. The big 2, Canfor and West Fraser don't want he same fate as this.You cant blame them for that, can you?

We have still got to wait on the pulp sector to reach a union contract, this may cause huge shuts in the sawmills if they go on strike, If they don't need the chips and there is too much lumber on the market, why run the sawmills?

It's sad to see the wood products sector in sucpoor condition. It's a time when no one working in any mill has job security or for that matter a job tomorrow.

Posted by: socredible on June 18 2008 8:35 PM

"Job security" can only exist if the company is profitable. If the owners of the firm and/or its creditors aren't getting theirs, it won't be long before you won't be getting yours.

While on an individual firm-by-firm basis the way any company is managed definitely has a bearing on its level of profit, there are other forces at play in the economy as a whole which can negate the best efforts of any individual manager, and the whole 'team' behind him.

Interestingly, we never seem to want to look at what it would take 'macro-economically' to maintain profit levels for Firms in general, and thereby enhance the chances for increased 'job security', or at least 'income' security if the 'job' is displaced.

Posted by: HD on June 18 2008 8:42 PM

Seen this coming for a long time.

Posted by: HD on June 18 2008 8:43 PM

Seen this coming for a long time.