Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

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
As popularity of the smart home is growing and continues to go mainstream, technological factors play a greater role. The IoT protocol houses the interoperability battery consumption, security, and configuration of a smart home device, and it can be difficult for companies to choose the right kind for their product. For both DIY and professionally installed smart homes, developers need to consider each of these elements for their product to be successful in the market and current smart homes.
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
SYS-CON Events announced today that Dasher Technologies will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Dasher Technologies, Inc. ® is a premier IT solution provider that delivers expert technical resources along with trusted account executives to architect and deliver complete IT solutions and services to help our clients execute their goals, plans and objectives. Since 1999, we'v...
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
SYS-CON Events announced today that TidalScale, a leading provider of systems and services, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale has been involved in shaping the computing landscape. They've designed, developed and deployed some of the most important and successful systems and services in the history of the computing industry - internet, Ethernet, operating s...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...
SYS-CON Events announced today that N3N will exhibit at SYS-CON's @ThingsExpo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. N3N’s solutions increase the effectiveness of operations and control centers, increase the value of IoT investments, and facilitate real-time operational decision making. N3N enables operations teams with a four dimensional digital “big board” that consolidates real-time live video feeds alongside IoT sensor data a...
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant th...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
SYS-CON Events announced today that Suzuki Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Suzuki Inc. is a semiconductor-related business, including sales of consuming parts, parts repair, and maintenance for semiconductor manufacturing machines, etc. It is also a health care business providing experimental research for...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.