Ainsworth board to be ‘open-minded’

VANCOUVER—An incoming director of Ainsworth Lumber Co. Ltd. said it has yet to be determined if assets of the struggling forest products firm will be sold off, or the former family-owned and run company will be rebuilt to prepare for better times in the industry.
Jonathan Mishkin, one of five new directors appointed to Ainsworth’s revamped board as part of a massive restructuring, said the plan is to go in “open-minded” about the future direction of the company devastated by high debt and a drop in lumber prices.

“We have seen this sort of tough times before [in the lumber industry],” said Mishkin, managing partner with Sanabe & Associates in New York, who has acted in the past for such forestry firms as Domtar and Interfor.
“What you can control is your cost of production and how much you produce. . . . We plan to be really open-minded about [what to do with Ainsworth],” he added.
Late Friday, Ainsworth proposed Mishkin and four other new members be appointed to its board of directors as part of a recapitalization plan announced last month.
The new board will have seven members, down from the previous 10, and no longer will include members of the Ainsworth family.
A company official confirmed yesterday that Allen, Brian, and Catherine Ainsworth—who held the president, chairman and chief executive, and chief operating officer roles at the company, respectively—will be leaving those positions.
They are the children of David and Susan Ainsworth, who founded the company in 1950 with one mill.
Catherine and Michael Ainsworth, the executive vice-president, also have signed one-year consulting contracts with the firm.
Kevin Mason of Equity Research Associates said the new management’s choices include maintaining the company as is and waiting out the industry downturn, selling some assets, or unwinding the company entirely.
“They have some good assets,” Mason said of Ainsworth.
“The new owners will have to decide . . . what do you keep or not keep? Who knows, when the good times come back, it could be a ripe time for consolidation,” added Mason.
The company owns one mill in each of B.C., Alberta, and Ontario and three in Minnesota.
It also owns 50 percent of a mill in Alberta.
Privately-held Grant Forest Products, which owns a 34 percent stake in Ainsworth, owns the other half of the Alberta mill.
Ainsworth shares jumped 18 percent on the Toronto Stock Exchange yesterday, or up 19 cents to $1.24, with 3,500 shares changing hands.
The recapitalization plan, negotiated by the outgoing board and certain major financial creditors, sees debtholders own 96 percent of the forestry products firm.