Western Forest Products Inc. Announces Sale of Ownership Interests in TFL 44 LP and Alberni Pacific Division Sawmill to Huu-ay-aht First Nations

PORT ALBERNI, British Columbia, March 16, 2020 (GLOBE NEWSWIRE) -- Western Forest Products Inc. (TSX: WEF) (“Western”) and Huumiis Ventures Limited Partnership (“Huumiis”), a limited partnership beneficially owned by Huu-ay-aht First Nations, (“Huu-ay-aht”), have reached an agreement whereby Huumiis will acquire a majority ownership interest in TFL 44 Limited Partnership and an ownership interest in a newly formed limited partnership that will own the Alberni Pacific Division Sawmill for total consideration of $36.2 million (the “Transaction”). The key details of the Transaction are summarized below.

TFL 44 Limited Partnership (“TFL 44 LP”)

• TFL 44 LP holds certain assets in Port Alberni, British Columbia, including Tree Farm Licence 44 (“TFL 44”) and other associated assets and liabilities
• Huumiis will acquire an incremental 44% ownership interest in TFL 44 LP from Western for $35.2 million
• On completion of the Transaction, Huumiis will own 51% of TFL 44 LP and Western will own 49% of TFL 44 LP
• Western may sell other area First Nations, including Huumiis, a further incremental ownership interest of up to 26% in TFL 44 LP, under certain conditions
• Western and TFL 44 LP will enter into a long-term fibre agreement to continue to supply Western’s British Columbia coastal manufacturing operations, which have undergone significant capital investment over the past several years

Alberni Pacific Division Sawmill (“APD Sawmill”)

• Western will transfer its APD Sawmill into a newly formed limited partnership (“APD LP”) along with certain other assets and liabilities
• Huumiis will acquire a 7% ownership interest in APD LP from Western for $1 million, and subject to further negotiations, Huumiis will have an option to purchase an incremental ownership interest in APD LP, which may include a majority interest

“This agreement is an example of how collaboration between First Nations and the private sector can contribute to reconciliation,” said Don Demens, Western’s President and Chief Executive Officer. “Western is committed to the long-term success of this partnership, and we look forward to continuing to work towards our shared goal of revitalization of a forest sector that benefits everyone in the Alberni Region.”