Doman Industries Ltd. has come out of court-ordered bankruptcy protection to re-emerge under a new name and new ownership made up largely of its unsecured bondholders.
Doman sought protection from creditors in November 2002.
“This has been a long and complex process which I am pleased to see is now at an end,” Rick Doman, president and chief executive of the company, renamed Western Forest Products, said in a news release.
“For the last 20 months, we have focused on restructuring the company, and now that we have done so it is time to move forward and optimize operations to take full advantage of the efficiencies we have implemented and strong market prices.”
Doman, son of founder and former chairman Herb Doman, thanked the company’s 3,000 remaining employees, its customers and local communities for standing by the beleaguered lumber and pulp producer.
The Duncan, B.C.-based company said about 25.6 million shares of Western Forest Products, worth $221 million US, were distributed to former Doman creditors and standby purchasers.
It’s expected company shares will start trading this week under the symbol WEF.
Doman said about 90 per cent of class A and B warrants were exercised. Former unsecured noteholders and trade creditors took up about 19.2 million common shares, and almost $100 million US in secured bonds were issued to the group after the warrants were exercised.
Standby purchasers took up another 3.5 million common shares and about $121 million US in secured bonds.
The proceeds were used mainly to repay Doman’s $160-million debt in secured notes and related costs, as well as funding its emergence from creditor protection, the company said.
The plan did not provide for any distributions to existing Doman shareholders other than non-transferable class C warrants of Western Forest Products exerciseable at three intervals over the next five years.
Doman, which had a half- dozen sawmills, two pulp mills and extensive coastal logging operations, was forced into bankruptcy protection after missing interest payments on the secured portion of its $1-billion debt.
