Interfor plugs tariff hole with equity
Caught between high tariffs and falling lumber prices, Interfor secured C$125m (US$90m) from a bought offering of stock to help cover its rising costs of shipping products to the US.
RBC Capital Markets and Scotiabank led a syndicate of banks in offloading 12.4m shares at C$10.05, a 6.8% discount to Thursday's TSX closing price of C$10.78.
The British Columbia-based forest products company is shoring up its balance sheet amid a 16% decline in framing lumber since early August. Meanwhile, tariffs on its US shipments are up 35.2%, costing Interfor US$125m this quarter.
Interfor is using the proceeds to improve its financial flexibility by paying down borrowings on a revolving credit facility, cutting its net debt to invested capital to 35%–36% and freeing up US$375m of liquidity.