New trends in the timber import market: San Group's asset sale triggers price fluctuations and supply chain risks

The asset sale of San Group has triggered new changes in the timber market, which is expected to have an impact on timber supply and price fluctuations. This process may affect the purchasing decisions of Chinese timber importers, and they need to pay attention to supply chain risks and market dynamics.

San Group sells assets to protect creditors

Timber Market News – Most of San Group’s assets, including its sawmill in Port Alberni, will be auctioned on January 17, 2025, with the goal of recovering about $150 million in debts for creditors, according to the Times Colonial. The process is being led by a court-appointed monitor, and San Group filed for creditor protection on November 29.

British Columbia Supreme Court Justice Michael Stevens agreed on Thursday to extend the company's creditor protection until May 30.

The monitoring agency Deloitte Restructuring Company obtained court approval to start the sales process at a hearing in Vancouver, planning to draw up a list of potential bidders and divide the company's assets into different sales projects. This approach is designed to maximize value and help meet creditors' requirements. The plan stipulates that the deadline for agreement with potential buyers is May 30, and then it is expected to obtain court approval on June 16, and the transaction closing date is no later than June 30.

The sale will include "various assets" with the exception of three entities. These include the Acorn sawmill, manufacturing plant and other facilities in Delta that are being leased due to a pending fire insurance claim, and other entities that were excluded due to a claim from another creditor, Canadian Western Bank.

Peter Rubin, a lawyer for the monitoring agency, told the court that the group appeared to owe the Royal Bank of Canada about $110 million and the Business Development Bank of Canada about $40 million. There are hundreds of creditors on the list of creditors.

LumberFlow Expert Interpretation

The asset sale of the San Group may trigger a series of impacts for Chinese timber importers. First, the supply of timber in the market may increase due to the asset auction, leading to short-term price fluctuations. However, debt issues may trigger supply chain risks and affect the stability of supply. Chinese importers should pay close attention to this auction in order to seize the right purchasing opportunity amid price fluctuations and optimize their purchasing decisions.

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