Troubled Chinese forestry company is going ahead with restructuring plant so creditors can acquire company assets.
July 11, 2012
by The Canadian Press
TORONTO: Troubled Chinese forestry company Sino-Forest Corp. says it is going ahead with a restructuring plan that will see its creditors acquire the company’s assets after it failed to find a suitable alternate buyer.
It will transfer the assets to a new company owned and controlled by its creditors in order to settle outstanding claims against the company.
The company is required to file its plan under the Companies’ Creditors Arrangement Act on or before Aug. 7.
Sino-Forest had been soliciting bids, but determined none of the bids qualified under its court-approved sale process.
Once the most valuable forestry company on the Toronto Stock Exchange, Sino-Forest was accused of fraud last year by short seller Muddy Waters Research.
The Ontario Securities Commission has since also formally accused the company and several former executives of lying to investors and attempting to mislead investigators.
The company filed for court protection from creditors earlier this year and put itself up for sale, saying that if it doesn’t receive a suitable takeover offer it will implement a restructuring plan under the Companies’ Creditors Arrangement Act.
Sino-Forest owns and manages tree plantations as well as manufacturing operations in China.