Carrier Forest License Purchase Offer Withdrawn
June 23, 2016 –
This week, the McBride Community Forest (MCFC) was informed by Carrier Lumber that the offer to sell a portion of a forest licence to MCFC has been withdrawn. Though MCFC is disappointed at the lost opportunity to expand the community forest, both parties emphasized their desire to maintain a good working relationship and to move forward on joint strategies.
Jeff McWilliams, interim manager for MCFC, learned the news in a call with Terry Kuzma, Woodlands Manager for Carrier. Mr. McWilliams reported the key reasons cited for pulling out of the deal is that Carrier is behind on their rate of harvest and is nearing the end of the current cut control period for the forest license included in the offer. Together with a need to address environmental liabilities, Carrier felt they had to move forward this summer with development activities in the Dore River which was one of the operating areas included in the sale offer.
When the current board and management team realized that an adequate due diligence review had not been completed on the proposed deal, the board created the Carrier Advisory Committee (CAC) in January 2016 to assess the viability of the Carrier offer. The CAC comprised of eight experienced locals and MCFC representatives reviewed the offer. They concluded that with MCFC’s current cut control issues and existing log supply agreements, MCFC could not meet the annual requirement of 50,000 m3 right of first refusal (ROFR) volume to be made available to Carrier.
The CAC also concluded that the purchase offer was a fantastic opportunity for MCFC and recommended in February that the MCFC meet with Carrier to discuss the challenges associated with meeting the FROR volume, the challenges associated with the ongoing MCFC corporate restructuring and the need for MCFC to complete a due diligence assessment of the deal. Unfortunately, this week was the first time Carrier was able to speak with MCFC about the deal. At this time, while acknowledging that Carrier was aware of MCFC’s reduced cut position, Mr. Kuzma indicated to Mr. McWiliams that Carrier was not willing to negotiate the FROR volume or any other terms of the purchase offer.
“Though this news is disappointing, our next steps are important. Carrier has a long and important history in the Robson Valley and a positive business relationship is a priority”, said Loranne Martin, chair of the MCFC. “The withdrawal of this opportunity means that the MCFC must be realistic and operate as a lean organization with the existing cut. But there are still opportunities for McBride and area in our community forest. Many community forests in the province are in the 20,000-30,000 m3 range and bring lots of benefits to their community. What we need now is for the community to work with us to maximize what we have for the greatest community benefit.”
For more information about MCFC go to www.mcbridecommunityforest.com or call 250 569 0262.