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Sino-Forest increases investment in Greenheart Resources

Photo: Morguefile
Photo: Morguefile
Published by
Steven Anderson - 12 May 2010

Sino-Forest Corporation is pleased to announce that Sino-Capital Global Inc, a wholly-owned subsidiary of Sino-Forest, has recently entered into an agreement to acquire 2,322,094,900 ordinary shares in Greenheart Resources Holdings Limited, representing approximately 30.3% of the issued share capital of Greenheart, subject to the conditions and adjustment as described below. Mr. Allen Chan, Sino-Forest’s Chairman and CEO said, "We currently own approximately 5.2% of the outstanding shares of Greenheart and have a 20% interest in Omnicorp Limited (40% fullydiluted), which controls Greenheart with a 60.4% ownership interest. We are therefore very pleased to acquire this additional Greenheart minority interest that Omnicorp has not exercised its option to acquire. We view Greenheart as a valuable long-term asset that will be held by oneor more of our subsidiaries in the future."

Mr Chan added, "Over 60% of the world’s tree growing stock is hardwood, with approximately 45% coming from Latin America, while Asia-Pacific is the world’s largest market for tropical hardwood logs. We see Suriname being one of the key regions where wood resources could be sourced from and imported into China. At the same time, Greenheart adheres strictly to the sustainable forestry management and silviculture systems developed by CELOS (The Centre for Agricultural Research in Suriname) which is practised by the Suriname Government. We have every confidence that Greenheart will operate in a responsible and environmentally-friendly manner and we will provide our knowledge and expertise in sustainable forestry management best practices to assist in this regard as required."

The acquisition is conditional on compliance by the sellers of the Sale Shares with certainformalities relating to pre-emption rights attaching to the Sale Shares.

The Sale Shares are being acquired in the secondary market from various third parties including an entity controlled by Simon Murray, a director of Sino-Forest. The value of the Sale Shares being sold by Mr. Murray to Sino-Global represents approximately 5.3% of the aggregate value of the overall transaction.