Click here to close now.

Welcome!

Microsoft Cloud Authors: Liz McMillan, Elizabeth White, Pat Romanski, Jaynesh Shah, Carmen Gonzalez

News Feed Item

Cathay Forest Products Corp. Update

TORONTO, Jan. 18, 2013 /CNW/ - Cathay Forest Products Corp. (the "Company") today provided an update on its activities since the reconstitution of its board of directors on July 30, 2012.

As previously disclosed, the board of directors of the Company was reconstituted on July 30, 2012, with the support of Canadian shareholders of the Company owning or controlling a significant proportion of its outstanding shares, following a Court process seeking to remove the former directors of the Company.  At a special meeting of the shareholders held on July 30, 2012, J. Bruce Barraclough, Peter K. Brown, C. Ian Ross and Michael D. Woollcombe were elected as the directors of the Company.

Upon the board reconstitution, the new board established a special committee consisting of all of the Company's directors for the purpose of assessing the assets and liabilities of the Company and its subsidiaries and considering the alternatives available to responsibly realize maximum possible value for the Company's direct and indirect net assets.

At the time of the board reconstitution, the Company and its Canadian subsidiaries had an aggregate of approximately Cdn. $780,000 in their Canadian bank accounts.  This was before payment of various costs and expenses incurred in relation to the reconstitution of the Company's board and certain liabilities of the Company that were outstanding at the time of the board reconstitution.

Since the board reconstitution, the new board has been working to properly understand the existing assets and liabilities of the Company and to develop and implement, to the extent possible, an orderly disposition of those assets in a manner that generates maximum possible value.  The new board's efforts in that regard have been challenged by a number of factors, including the lack of liquidity within the Company and its subsidiaries, the location of the Company's principal indirect assets in the People's Republic of China (the "PRC") and the Russian Federation, the ownership of certain of those indirect assets through joint-venture or other arrangements in which third parties have an interest, the staff turn-over that had previously occurred at the Company and its subsidiaries, the difficulties in accessing available corporate and other records, and the continuing need to manage various legacy issues, claims and liabilities arising from the business and affairs of the Company prior to the board reconstitution.

Based upon its activities to date, the new board believes that it is in the best interests of the Company and all its shareholders and other stakeholders to effect an orderly disposition of all of the Company's direct and indirect assets as expeditiously as reasonably possible while generating the maximum proceeds reasonably attainable, and to use the proceeds received by the Company to satisfy its liabilities with any excess being distributed to the Company's shareholders.  The timing of completing such dispositions, the proceeds that will be realized and the amount, if any, that will be available for distribution to the Company's shareholders remains unknown at this time.

Well prior to the reconstitution of the Company's board, the Company's common shares had been suspended from trading by the TSX Venture Exchange (that suspension occurring on or about February 1, 2011), and the Company had been de-listed.  Since May 6, 2011, the Company's common shares have also been the subject of cease trade orders by the Ontario Securities Commission.  The new board does not contemplate that the shares of the Company will ever be re-listed for trading, nor does the new board believe that attempting to do so, given the financial and other circumstances of the Company, would be feasible or in the best interests of the Company or its shareholders.  Instead, as indicated above, the new board is pursuing an orderly disposition of the Company's direct and indirect assets with a view to distributing the net proceeds, after satisfying liabilities, to the Company's shareholders.    

In order to reduce costs, the new board previously closed the Company's corporate office located in Richmond Hill, Ontario.  Shareholders or other stakeholders who wish to contact the Company should address any enquiries to Bay Adelaide Centre, Suite 910, 333 Bay Street, Toronto, Ontario, M5H 2R2 (telephone: 416-947-1700; fax: 417-947-1256).

                    Indirect Assets of the Company in the People's Republic of China

At the time of the board reconstitution, the Company's indirect subsidiaries in the PRC had very little cash and were experiencing significant liquidity issues.  The new board has been working and continues to work to reduce the cash burn of the Company's local subsidiaries in the PRC, including through reductions in staffing, in an effort to ensure that these subsidiaries are able to meet their liabilities and dispose of their assets in as orderly a fashion as possible.

Based upon the information currently available to the new board, it believes that the principal remaining forestry-related assets indirectly held by the Company in the PRC are its standing timber properties in the provinces of Jiangxi and Henan, both of which continue to be operational.  The Jiangxi properties are indirectly wholly-owned by the Company and the properties in Henan are held through a subsidiary, Henan Xinya Cathay Forest Products Co., which is 70% indirectly owned by the Company.  The Company is actively seeking to sell its interests in the Jiangxi and Henan properties and considering its alternatives to do so, although at this point the timing of completing any such sale and the proceeds that may be realized remains unknown.

Prior to the reconstitution of the Company's board, the Company's indirect subsidiaries in the PRC had effectively disposed of or relinquished any remaining interest in the Shandong properties and a significant portion of the Jiangsu fast growth poplar plantations and used the proceeds therefrom to satisfy ongoing liabilities in the PRC.

In December 2012, Jiangxi Cathay Forest Co., Ltd., an indirect wholly-owned subsidiary of the Company, entered into a Forest Land Use Rights Transfer Agreement to dispose of its interest in certain lands that had previously been intended for a fast-growth poplar plantation.  Subject to certain closing conditions, which remain to be satisfied, the aggregate consideration that could ultimately be received under this agreement is approximately $160,000.

Prior to the reconstitution of the Company's board, the Company caused an arbitration in Shanghai to be commenced against the Company's joint venture partner in Guizhou Hangfang Cathay Forestry Company, Limited for amounts that the Company claimed were owed by the joint venture partner.  A decision in relation to that arbitration is pending.

Based upon the information currently available to the new board, it appears that, as a result of activities prior to the reconstitution of the Company's board, there are significant amounts owed indirectly to the Company related to Raohe Songlin Economic and Trade Co., Ltd., a domestic PRC entity previously involved in log importing of which the Company indirectly holds a 60% interest.  Since the reconstitution of the Company's board, no progress has been made in collecting this receivable and its ultimate collectability remains uncertain.  The Company intends to further address matters related to this receivable once its liquidity position allows it to do so.

                    Indirect Assets of the Company in the Russian Federation

On March 7, 2012, prior to the reconstitution of the Company's board, the Company announced that it had entered into an agreement with Russia Forest Products Group ("RFP"), a Russia- based forestry company, pursuant to which, subject to a number of significant conditions, RFP would acquire a controlling interest in DalEuroLes LLC ("DalEuroLes").  The Company has previously disclosed that it holds a 51% interest in DalEuroLes.  The consideration payable to the Company under the proposed transaction, subject to the satisfaction of conditions, included a cash payment of U.S. $13 million with the Company to own an approximate 30% indirect interest in DalEuroLes once the transaction was complete.

Prior to the reconstitution of the Company's board, the proposed arrangements involving RFP and the Company had broken down and these arrangements were no longer actively being pursued by RFP or the Company.  The break-down appears to have resulted from, among other things, disagreements between the Company and the local entity in Russia that holds a 46% interest in and operates DalEuroLes, Finmashineri Co., Ltd. ("Finmashineri"), including in respect of the ownership and control of DalEuroLes.  For at least several months prior to the reconstitution of the Company's board, Finmashineri was directing the business and affairs of DalEuroLes, with little or no direction or input from or financial reporting to the Company.

Following the reconstitution of the Company's board, the new board endeavoured to re-enter into discussions with RFP regarding DalEuroLes, to date without success.

Since the reconstitution of the Company's board, the Company has received no financial or other reporting regarding DalEuroLes or the current state of its two standing timber concessions in Kharbarovsk, Russia.

Working within the Company's liquidity constraints, the new board continues to assess strategies to realize the maximum possible value from the Company's prior investment in DalEuroLes, although the amount that will ultimately be realized, if any, and the timing of that realization remains unknown at this time.

                    Class Action

As set out in the Company's news release of September 12, 2011, the Company and six of its former directors and officers were named as defendants in a proposed class action commenced in the Ontario Superior Court by Mac Killoran.  The proposed class action advances a number of claims, primarily relating to financial information disclosed by the Company in 2009 and 2010 that was the subject of the financial restatement announced by the Company in February 2011.  In September 2012, the Court allowed the substitution of Kingsley Snelgrove for Mac Killoran as the proposed representative plaintiff and granted leave for the action to proceed against Anthony Ng, who was previously Chief Executive Officer and a director of the Company, and who has not to date responded to the action or appeared in court.  The motion by the plaintiff for leave under the Securities Act (Ontario) to proceed with the action as against the remaining defendants, including the Company, and for certification of the action as a class action is scheduled to be heard commencing April 17, 2013.  The Company is defending the action.

                    Other

Shortly prior to the reconstitution of the Company's board, the new board was made aware of the existence of certain banking and financial records appearing to show that:

(a)       payments totalling RMB 20 million were previously made by a subsidiary of the Company in the PRC between February 2007 and June 2009, for no apparent legitimate business purpose, to two companies in which a then director of the Company resident outside of Canada appears to have had an interest; and
     
(b)       on or about January 12, 2010, payments of RMB 2 million were made by a subsidiary of the Company, for no apparent legitimate business purpose, to two corporate customers that had contracted during 2009 to buy timber from a subsidiary of the Company in the PRC, with those payments having been made on or about the same date as those same two corporate customers each made a payment of RMB 2 million to a subsidiary of the Company ostensibly pursuant to the contracts for the sale of timber to those companies.

Since the reconstitution of the Company's board, the new board, with the assistance of counsel, has reviewed information related to these payments and made enquiries of and requested information from the former director referred to above regarding these payments.  To date, the former director has refused to provide assistance in obtaining information or documentation related to the payments, and has denied having received any benefit from such payments.  The payments were made while Mr. Ng was the Chief Executive Officer of the Company.  After learning of the payments, the Company also previously sought without success to obtain information and documentation from Mr. Ng with respect to the payments.

The new board is considering what actions the Company can and should take in relation to these matters including to seek recovery of the RMB 20 million.

SOURCE Cathay Forest Products Corp.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
The world is at a tipping point where the technology, the device and global adoption are converging to such a point that we will see an explosion of a world where smartphone devices not only allow us to talk to each other, but allow for communication between everything – serving as a central hub from which we control our world – MediaTek is at the heart of both driving this and allowing the markets to drive this reality forward themselves. The next wave of consumer gadgets is here – smart, connected, and small. If your ambitions are big, so are ours. In his session at @ThingsExpo, Jack Hu, D...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SYS-CON Events announced today that MetraTech, now part of Ericsson, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Ericsson is the driving force behind the Networked Society- a world leader in communications infrastructure, software and services. Some 40% of the world’s mobile traffic runs through networks Ericsson has supplied, serving more than 2.5 billion subscribers.
SYS-CON Events announced today that O'Reilly Media has been named “Media Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. O'Reilly Media spreads the knowledge of innovators through its books, online services, magazines, and conferences. Since 1978, O'Reilly Media has been a chronicler and catalyst of cutting-edge development, homing in on the technology trends that really matter and spurring their adoption by amplifying "faint signals" from the alpha geeks who are creating the future. An active participa...
We’re entering a new era of computing technology that many are calling the Internet of Things (IoT). Machine to machine, machine to infrastructure, machine to environment, the Internet of Everything, the Internet of Intelligent Things, intelligent systems – call it what you want, but it’s happening, and its potential is huge. IoT is comprised of smart machines interacting and communicating with other machines, objects, environments and infrastructures. As a result, huge volumes of data are being generated, and that data is being processed into useful actions that can “command and control” thi...
There will be 150 billion connected devices by 2020. New digital businesses have already disrupted value chains across every industry. APIs are at the center of the digital business. You need to understand what assets you have that can be exposed digitally, what their digital value chain is, and how to create an effective business model around that value chain to compete in this economy. No enterprise can be complacent and not engage in the digital economy. Learn how to be the disruptor and not the disruptee.
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big Data and deployments are processing massive data volumes from wearables, utilities and other machines...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you'll have no problem fil...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
The worldwide cellular network will be the backbone of the future IoT, and the telecom industry is clamoring to get on board as more than just a data pipe. In his session at @ThingsExpo, Evan McGee, CTO of Ring Plus, Inc., discussed what service operators can offer that would benefit IoT entrepreneurs, inventors, and consumers. Evan McGee is the CTO of RingPlus, a leading innovative U.S. MVNO and wireless enabler. His focus is on combining web technologies with traditional telecom to create a new breed of unified communication that is easily accessible to the general consumer. With over a de...
Disruptive macro trends in technology are impacting and dramatically changing the "art of the possible" relative to supply chain management practices through the innovative use of IoT, cloud, machine learning and Big Data to enable connected ecosystems of engagement. Enterprise informatics can now move beyond point solutions that merely monitor the past and implement integrated enterprise fabrics that enable end-to-end supply chain visibility to improve customer service delivery and optimize supplier management. Learn about enterprise architecture strategies for designing connected systems tha...
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, deploy, and manage applications integrating voice, video and data. He is the co-founder of TeleStax, a...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., showed what is needed to leverage the IoT to transform your business. He discussed opportunities and challenges ahead for the IoT from a market and technical point of vie...
Grow your business with enterprise wearable apps using SAP Platforms and Google Glass. SAP and Google just launched the SAP and Google Glass Challenge, an opportunity for you to innovate and develop the best Enterprise Wearable App using SAP Platforms and Google Glass and gain valuable market exposure. In his session at @ThingsExpo, Brian McPhail, Senior Director of Business Development, ISVs & Digital Commerce at SAP, outlined the timeline of the SAP Google Glass Challenge and the opportunity for developers, start-ups, and companies of all sizes to engage with SAP today.
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...