Conifex Secures $30M Canadian Loan to Fund Sawmill Restart
Conifex Timber obtains a seven-year government facility to restore full production capacity at its Mackenzie mill amid sector disruptions.
Key points
- Conifex secured a $30 million, seven-year loan from the Government of Canada to bolster liquidity.
- The facility is secured by company assets and ranks alongside or below existing secured debt.
- Funds will support the return to two-shift operations at the Mackenzie, B.C. sawmill.
Conifex Timber Inc. has secured a $30 million repayable loan under the Government of Canada’s Large Enterprise Tariff Loan program. The facility provides immediate liquidity to sustain operations at the company’s Mackenzie, B.C. sawmill while it navigates ongoing market disruptions in the Canadian forest products sector.
The financing is structured as a seven-year term secured by substantially all of Conifex’s assets. According to Woodworking Network, the new debt ranks pari passu with or junior to existing secured lenders, offering management the capital needed to stabilize cash flow and prepare for a return to normalized production levels.
Financial structure supports operational continuity
CEO Ken Shields stated that the loan provides critical financial flexibility during a period of significant disruption. The company emphasized that this funding, combined with support from existing lenders, allows Conifex to maintain essential operations without compromising its long-term solvency.
The facility bears a market-based interest rate, ensuring the cost of capital remains aligned with prevailing economic conditions. This structure enables Conifex to manage its balance sheet while addressing the specific liquidity constraints imposed by the current tariff environment.
Mackenzie mill targets two-shift recovery
Conifex intends to use the proceeds to reestablish normalized two-shift operations at its Mackenzie facility. President and COO Andrew McLellan noted that the financing provides the confidence to plan a restart and bring employees back to work, directly sustaining jobs in the region.
The company views this operational restart as the foundation for a stronger future, producing sustainable lumber for domestic and international markets. McLellan highlighted the importance of maintaining supply chains and supporting the communities and First Nations whose territories host the operations.
Strategic positioning for market recovery
Management asserts that the loan positions Conifex to capitalize on a potential recovery in the lumber market. By securing long-term liquidity, the company aims to strengthen its operational base rather than seeking short-term relief, aligning its financial strategy with broader industry stabilization efforts.
