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Fibrek to redeem C$25.87 million of 7% convertible debentures due 2011
By Devika Patel
Knoxville, Tenn., Jan. 27 - Fibrek Inc. said it will redeem C$25,874,000 of its C$51,749,000 7% convertible unsecured subordinated debentures due Dec. 31, 2011, according to a press release.
The redemption, which is for par plus accrued interest, will amount to C$1,011.12 for each C$1,000 of debentures and will be paid through available funds on Feb. 28.
"Over the past three quarters, we have begun to reap the benefits of our transformation program and have achieved significant improvements in our earnings and operating cash flow," vice president and chief financial officer Patsie Ducharme said in the release. "At this time, we have decided to use our available cash to redeem roughly half of our outstanding debentures.
"With this redemption, we expect to save approximately C$1.5 million in interest expense in 2011 and reduce our debt to total capitalization ratio by approximately 3%. It is currently Fibrek's intention to repurchase the remaining debentures before their Dec. 31, 2011 maturity, assuming our financial position and prevailing market conditions are appropriate," Ducharme concluded.
The unincorporated open-ended trust is based in Saint-Felicien, Quebec.
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