Western Forest Products Inc. Announces Sale of Ownership Interests in TFL 44 LP and Alberni Pacific Division Sawmill to Huu-ay-aht First Nations
Western Forest Products Inc. (“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.”
“This is an important step to gain more control over the ?ahuuli of the Huu-ay-aht ?aw?ii? (traditional territory of the Hereditary Chiefs),” explains Tayii ?aw?il ?iišin (Head Hereditary Chief Derek Peters). “Our sacred principles of ?iisaak (utmost respect), ?uu?aluk (taking care of), and hišuk ma c?awak (everything is one), will guide us as we create more opportunities and wealth for our Nation in a way that protects our resources for present and future generations.”
“This is an historic announcement that is fundamentally about reconciliation and forestry revitalization,” said Chief Councillor Robert J. Dennis Sr. “This agreement will enable Huu-ay-aht to have more jurisdiction over our ?ahuuli (traditional territory), strengthen the long-term sustainability of the forest sector in the Alberni Region, provide strong environmental stewardship that aligns with Huu-ay-aht’s forestry guiding principles, and create more opportunities for First Nations, including our citizens.”
The completion of the Transaction is subject to satisfaction of customary closing conditions, financing, and certain third party consents, including approval by the British Columbia Provincial Government and the Huu-ay-aht First Nations People’s Assembly. The Transaction is expected to close in the second quarter of 2020.
The agreement announced today builds on the Reconciliation Protocol Agreement between Huu-ay-aht and Western signed in March 2018 and the TFL 44 LP transaction completed in March 2019. It is a positive step towards the furtherance of Huu-ay-aht’s and Western’s framework for reconciliation and revitalization of the Alberni Region. The framework includes economic opportunities for increased participation of the other 13 area First Nations through increased engagement, tenure ownership, employment and business opportunities, sustained domestic manufacturing, increased training, effective marketing and value-added product innovation, and strong environmental stewardship – all in a manner consistent with the British Columbia Declaration on the Rights of Indigenous Peoples Act.
About Huu-ay-aht First Nations and Huumiis Ventures Limited Partnership
Huu-ay-aht is an indigenous community located on the west coast of Vancouver Island in British Columbia. It is a part of the Nuu-chah-nulth Nation, formerly called the Nootka. Huu-ay-aht is a party to the Maa-nulth Final Agreement, a modern treaty that grants its five member-nations constitutionally-protected self-government as well as ownership, control and law-making authority over their lands and resources. Huumiis is a limited partnership formed under the laws of British Columbia that is beneficially-owned by the Huu-ay-aht. For more information, visit huuayaht.org.
About Western Forest Products Inc.
Western is an integrated forest products company building a margin-focused log and lumber business to compete successfully in global softwood markets. With operations and employees located primarily on the coast of British Columbia and Washington State, Western is a premier supplier of high-value, specialty forest products to worldwide markets. Western has a lumber capacity in excess of 1.1 billion board feet from eight sawmills and four remanufacturing facilities. The Company sources timber from its private lands, long-term licenses, First Nations arrangements, and market purchases. Western supplements its production through a wholesale program providing customers with a comprehensive range of specialty products.
Western Forest Products Inc. – Stephen Williams – Executive Vice President & CFO – (604) 648-4500
Huu-ay-aht First Nations – Amanda Munro – Communications – (604) 360-3994
Source: Western Forest Products Inc.