Conifex Timber Inc. is a few steps away from raising $25 million.
A syndicate of underwriters has agreed to purchase $23.5 million worth of shares, the company said Thursday, and it intends to raise a further $1.5 million through a non-brokered private placement.
Under the brokered deal, underwriters TD Securities Inc., CIBC and Salman Partners Inc., will purchase 3,357,143 common shares at $7 each, adding up to $23.5 million. The deal, brokered by Raymond James Ltd., includes an option to purchase up to 503,571 additional shares, which would raise the total to $27 million.
The non-brokered private placement involves a sale of 214,286 shares.
Both transactions are expected to close on Feb. 16 and are subject to regulatory and stock exchange approval.
The money will "fund capital expenditures and for general corporate purposes," Conifex said in a statement.
The company is in the process of building a a $50-million bioenergy plant in Mackenzie, 186 kilometres north of Prince George, where it owns two sawmills.
Expected to be completed by the end of this year, would be the first stand-alone bioenergy plant to be built in northern B.C. following the B.C. Liberal government's launch of its bioenergy strategy more than three years ago.
Conifex also owns a sawmill in Fort St. James, 152 kilometres northwest of Prince George, and its operations add up to 745 million board feet per year on a two-shift basis. It also holds forestry licences with an allowable annual cut of 1.6 million cubic metres.
