Sino-Forest Corporation SNOFF today announced that it has received written
notices of default dated December 16, 2011 in respect of its Senior Notes
due 2014 and its Senior Notes due 2017. The notices, which were sent by the
Trustee under the Senior Note Indentures, reference the Company's previously
disclosed failure to release its 2011 third quarter financial results (the
"Q3 Results") on a timely basis. An "Event of Default" under the Senior Note
Indentures will have occurred if the Company fails to cure or otherwise
fails to address the breach of indenture giving rise to the notices of
default within 30 days following receipt of the notices. The Company does
not expect to be able to file the Q3 Results and cure the default within the
30 day cure period.
The Company and its advisors met on December 14, 2011 with an ad hoc
committee of note holders and their legal counsel. The Company was informed
by the ad hoc committee's legal counsel that the note holders attending and
others represented at the meeting by legal counsel hold a substantial
portion of the Company's four series of senior and convertible notes. As
there is no registry of beneficial holders for the notes, the Company cannot
independently verify the holdings of those who attended or were represented
by counsel. The note holders and their legal counsel expressed a willingness
to work cooperatively with the Company in an effort to preserve value for
the benefit of the Company's stakeholders. The Company has since been
informed that the note holders present at the meeting or represented by
counsel did not initiate or support the issuance of the notices of default
that the Company has received from the Trustee.
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