Sino-Forest greenshoe fully exercised, lifts 5% convertibles to $345 million

By Devika Patel

Knoxville, Tenn., Aug. 1 - Underwriters for Sino-Forest Corp.'s 5% five-year convertible senior unsecured notes exercised their over-allotment option in full for $45 million more of the notes, increasing the size of the issue to $345 million, the company said in a press release.

As previously reported, the company sold the convertibles at par on July 17, after the close, via underwriters Merrill Lynch and Credit Suisse. The notes were sold in a Rule 144A deal in the United States and under Regulation S in international markets.

The notes have a conversion premium of 35%, a conversion price of $20.29 and a conversion ratio of 49.2974.

The convertibles are non-callable and may not be put.

There will be full takeover and dividend protection.

Sino-Forest, a Mississauga, Ont.-based commercial forestry operator in China, said it will use about $230 million of the proceeds as initial capital to acquire plantation forests in the Fujian Province. It will use about $15 million to lease land for planting jatropha trees, and any remaining proceeds will be used for working capital.

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