(CP)
Friday, May 2, 2008

VANCOUVER—Ainsworth Lumber Co. Ltd. is exploring strategic alternatives to strengthen its balance sheet and enhance its liquidity, chief executive Brian Ainsworth said yesterday after shares in the company gained more than 40 percent.
In response to a request from the Toronto Stock Exchange, the company said it was too early to say what the impact of any strategic alternative would be on shareholders.

Ainsworth shares closed up $1.24, or 46 percent, at $3.94 on the Toronto Stock Exchange.
In March, the company failed in a bid to refinance $823.5 million (U.S.) worth of corporate debt by exchanging a series of older unsecured bonds with new secured ones.
Ainsworth announced in mid-February it had begun an offer to exchange several series of unsecured bonds, which expired between 2010 and 2014, for new secured bonds that would expire in June, 2014.
The offer was conditional on 50.1 percent of bondholders tendering their securities.
The proposed refinancing was meant to lower the company’s debt costs at a time the North American forestry sector is facing tough times because of the slump in the U.S. housing market.
Ainsworth already has announced production cuts at its oriented strand board mills in Grande Prairie, Alta. and 100 Mile House, B.C. due to reduced customer demand for the popular plywood substitute from U.S. homebuilders.
The company has solid wood plants in Abbotsford, Lillooet, Clinton, and Savona, all in B.C., and oriented strandboard plants in 100 Mile House and Grand Prairie, as well as in Barwick, Ont. and Bemidji, Cook, and Grand Rapids in Minnesota.