Sino-Forest Proceeds to Implement Restructuring Transaction Contemplated by the Restructuring Support Agreement and Terminates Sale Solicitation Process

TORONTO, July 10, 2012 /PRNewswire/ - Sino-Forest Corporation ("Sino-Forest" or the "Company") announced today that it is proceeding to implement the previously announced restructuring transaction pursuant to which its creditors will acquire substantially all of the assets of the Company (the "Restructuring Transaction") in accordance with the terms described in the Restructuring Support Agreement (the "Support Agreement") entered into by certain noteholders (the "Ad Hoc Committee") and the Company on March 30, 2012.  Pursuant to the Restructuring Transaction, Sino-Forest will transfer substantially all of its assets, other than certain excluded assets, to a newly formed entity owned and controlled by its creditors in full and final settlement of all claims against the Company.

As announced on June 8, 2012, holders of more than 72% of the aggregate principal amount of the Company's outstanding notes (with more than 66.67% of the principal amount of each of the four series of Notes) have agreed to be parties to the Support Agreement. Pursuant to certain revised deadlines under the Support Agreement, Sino-Forest is required to file a plan under the Companies' Creditors Arrangement Act ("CCAA") in respect of the Restructuring Transaction on or before August 7, 2012.

In accordance with the sale process procedures approved by the Ontario Superior Court of Justice on March 30, 2012 (the "SPP"), Sino-Forest's financial advisor, Houlihan Lokey, had been soliciting offers to purchase substantially all of Sino-Forest's assets. Following consultation with the court-appointed Monitor, FTI Consulting, the Company's financial advisor and the Ad Hoc Committee and its advisors, the Company determined that none of the bids submitted pursuant to the SPP constituted Qualified Bids as defined in the SPP and the sale solicitation process has been terminated in accordance with the SPP.

Additional details regarding the Restructuring Transaction are contained in the Support Agreement, a copy of which is available at www.sedar.com and on the Monitor's website at http://cfcanada.fticonsulting.com/sfc.

Inquiries

All inquiries regarding the Company's proceedings under the CCAA should be directed to the Monitor, FTI Consulting, via email at: sfc@fticonsulting.com, or telephone: (416) 649-8094. Information about the CCAA proceedings, including copies of all court orders and the Monitor's reports, are available at the Monitor's website http://cfcanada.fticonsulting.com/sfc.

This news release contains forward-looking information within the meaning of applicable securities laws, including statements relating to the Company's expectations with respect to the implementation of the Restructuring Transaction and the expected terms of, and consideration to be received pursuant to, the Restructuring Transaction.  The forward looking statements expressed or implied by this news release are subject to important risks and uncertainties. When used in this news release, the words "is proceeding", "will" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. Forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. The results or events predicted in these statements may differ materially from actual results or events and are not guarantees of future performance of Sino-Forest. Factors which could cause results or events to differ from current expectations include, among other things: actions taken against the Company by governmental agencies and securities and other regulators; actions taken by the Company's noteholders, lenders, creditors, shareholders, and other stakeholders to enforce their rights; the Company's ability to negotiate and finalize definitive documentation regarding the Restructuring Transaction on the terms contemplated, if at all; the Company's ability to complete the Restructuring Transaction in the timeframe contemplated, if at all, which is subject to the satisfaction or waiver of numerous conditions, some of which are beyond the control of the Company, including conditions in respect of the approval of the Court, the Company's creditors and other stakeholders and securities and other regulatory authorities; the outcome of examinations and proceedings currently underway by law enforcement and securities regulatory authorities; the outcome of class action or other proceedings which have been or may in future be initiated against the Company; the accuracy and outcome of the results of tree asset testing undertaken by the Company; the Company's reliance on key employees; the Company's ability to acquire rights to additional standing timber; the Company's ability to meet its expected plantation yields; the cyclical nature of the forest products industry and price fluctuation in and the demand and supply of logs; the Company's reliance on the relationship with local plantation land owners and/or plantation land use rights holders, authorized intermediaries, key customers, suppliers and third party service providers; the Company's ability to operate its production facilities on a profitable basis; changes in currency exchange rates and interest rates; the evaluation of the Company's provision for income and related taxes; economic, political and social conditions and government policy in China, the Republic  of Suriname and New Zealand; and other factors not currently viewed as material that could cause actual results to differ materially from those described in the forwarding-looking statements. Sino-Forest Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Sino-Forest Corporation




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