alertmeipp

Down more now. LONGUEUIL, QC, July 16 << ------------------------------------------------------------------------- TSX: FBK www.fibrek.com ------------------------------------------------------------------------- HIGHLIGHTS: - A comprehensive refinancing of approximately $190 million supported by committed financial partners - A strong and sustainable balance sheet with a reduced debt and lower interest expenses - A debt-to-total capitalization ratio which is reduced from 32% to 23% and is amongst the lowest in the industry >> LONGUEUIL, QC, July 16 /CNW Telbec/ - Fibrek Inc. (TSX: FBK) today announced that it has successfully completed its previously announced refinancing transactions comprised of: << - a 5-year secured term loan with a subsidiary of the Société générale de financement du Québec (SGF), for an amount of $78 million bearing interest at a rate of 8.25% per year; - a $75 million three-year asset-based secured revolving credit facility with GE Canada Finance Holding Company; and - a $40 million (gross proceeds) rights offering pursuant to which Fibrek issued an aggregate of 39,602,848 common shares, of which: (1) 28,057,068 were issued upon the exercise of the basic subscription privilege, (2) 2,996,274 were issued pursuant to the additional subscription privilege; and (3) 8,549,506 were issued under a standby purchase agreement with Fairfax Financial Holdings Limited. Following completion of the rights offering, Fairfax now owns approximately 25.85% of the issued and outstanding common shares of Fibrek. >> "We are very pleased to have successfully completed this comprehensive refinancing which is a cornerstone to our future growth and success. We are also very proud to have concluded these transactions despite extremely difficult economic conditions. We are privileged to count on the support of such financial partners which further confirms the strength of our business model. Fibrek is well positioned to benefit from a recovering economy with a reduced debt, superior liquidities and the ability to better pursue its business objectives and seize appropriate investment opportunities as they arise," indicated Pierre Gabriel Côté, President and Chief Executive Officer of Fibrek Inc. "This refinancing has allowed Fibrek to repay its existing revolving credit facility maturing on October 30, 2010 and its existing term loan maturing on October 30, 2012. As a result of this refinancing, the company has improved its debt-to-total capitalization ratio to 23%, has reduced its interest expenses and has extended its debt maturity profile. As evidenced by Standard & Poor's Ratings Services' recent upgrade of our corporate credit rating to B-, this puts Fibrek in a stronger financial position to face any future volatility in our business," concluded Patsie Ducharme, Vice President and Chief Financial Officer of Fibrek Inc.

would the sell off comes because the BP spill seems to be contained now?

He got this right tho: "For sure, the share price, rights price and this offering is very dissapointing". PPS slides from about 1.6 to 1.01 currently since the right offering. Very disappointing. Btw, seems like I got my additional subscriptions from IB (listed but not tradeable yet).

Few things: 1) they are not getting discount from Abitibi-bowater contract anymore. It's market price. 2) If only $100 to best customers, it's an improvement percent-wise, I think they were doing 10%-15% on average last Q. 3) Even assume the net profit were $120/ton, Saint-Félicien Mill produces 1000 tonnes / pay, so 120k per day profit, a quarter = 10millions. about 7.6 cents per quarter from NSBK. That's P/E of 3-4. Not too bad. anyways, judging from his previous posts, I seriously doubt this guy. Thoughts?

Thanks. Truth be told, I had the guts to swing big at 06 and end up hitting a shxt-bag. :) So, I seldom have a position larger than 20% now.

>>My goal is $2 million. $1 million in FI generating 7.5 - 10% to live off and $1 million for equities / junk bonds. No where near there but I would sleep like a baby at that point. That's interesting... very similar to my thinking. Myth465, what's your target annual rate of return?

the current exchange rate is great for converting US debt to CDN.

What's interesting about it? I don't see anything new in there...

To better illustrate how the right offering had impacted the pps: May-12 Current Percent SFK 1.58 1.06 -32.91% CFX 16.18 14.96 -7.54% MERC 4.58 4.34 -5.24% TMB 2.35 2.12 -9.79% UFS 70.41 51.69 -26.59% So the average drop (excluding SFK) is ~12%. SFK dropped additional 20% since the right offering news. It's also likely that balance sheet had further improved by 20 millions in Q2. I think this price gives excellent risk/reward ratio.

I don't think FFH will get much shares. Some may still subscribe. For example, if u own 1 million shares, buying 300k in the market without driving up the price is impossible given the light volumes we have had. Then some may oversubscribe. The valuation is very cheap. 1.5x CF. Hard for me to sell. So far this investment has been a disaster. I think some are selling because of the additional subscription options as well.

Day low of 1.04... :-\

A bullish article on Domtar but it applies quite nicely on FBK. http://www.istockanalyst.com/article/viewarticle/articleid/4243146# "$100-$200/Tonne Pulp Correction Seen: As they have written, Credit Suisse sees a second half 2010 pulp-price correction followed by rising prices for most of 2011 and 2012. They even build in some impact on uncoated prices. Yet, their 2010 and 2011 EPS estimates are the highest on the Street." "Free Cash Flow Exceeds Stock Price"

should have sold when the right news was announced. :) would get 40% more shares easily. most stock goes back up after right offerings. Good luck.

I think ur analysis should start when the right offering was announced to see the impact of right offering. everything is cheaper from april/may peak. not just pulp.

yes. the audio was bad.

guys guys... the current share price does not reflect the high pulp price at all.

That's good. The management can't be more humble: "We are very pleased with this revision in our rating. This upgrade coupled with our refinancing are positive signs towards recovery and are aligned with our strategy of strengthening our balance sheet"

I will as long as the price does not tank below it. :) I am thinking hard whether to over-subscribe... Not sure how much it will run after Q2.... Q3 - Q4 will start to show the benefits of these financing transactions. :D

So, are you guys going to exercise all the rights?

call ur brokers. some brokers will not ex. your rights automatically.

Yes, my mistake. I feel better now actually

nope. The record date is tmw.

Probably to fund the SFK buyout. Just jokes.

Cost is coming down: -Interests on the new facilities should be quite a bit lower. -Cost-cutting problem is going on. -Quebec's woodchip price is also coming down so they should get better pricing next year. -Discount will also come down as the market getting tighter. The current discount was like 15%, reducing 5% of it translate to 7M. They don't need need 1000 pulp price to be very profitable.

The rights have shown up on my IB account already. I think you guys need to understand they have worked on this deal with their lenders since the last crisis. They need to lower their leverage. They can either do a secondary or right offering. Right offering is picked because it won't dilute the existing shareholders. It may seems unnecessary to get the 40millions now because the co. is capable of generating 10-20 millions cash per quarter. But no new can guarantee where the pulp price will head. It's a conservative move. USD down a bit. Good time to convert the USD debt to CDN. 2Q won't show the full benefit of this deal. The rest of year will be really interesting. Mr. Market is our friend.