 |
ECT ANNOUNCES ACQUISITION OF MINORITY STAKE IN KAFUS
ECT's Investment to Finance Fibreboard Facility Being Developed by Kafus Subsidiary
FOR IMMEDIATE RELEASE: Thursday, July 17, 1997
HOUSTON -- Enron Capital & Trade Resources Corp. (ECT), a subsidiary of Enron Corp., announced today that it has acquired an equity interest in Kafus Capital Corporation. Through its investment in Kafus, ECT is helping to finance a fibreboard manufacturing facility in Riverside, California to be developed by CanFibre Group Ltd., a subsidiary of Kafus.
Under the terms of the transaction with Kafus, ECT has invested $21 million (US) for which it will receive convertible preferred stock, common stock, and warrants to purchase additional common stock. Kafus will invest the majority of the proceeds from ECT in the CanFibre project in Riverside. This facility will produce high-quality, medium density fibreboard (MDF) from waste wood that would otherwise be discarded.
CanFibre also transferred to ECT 750,000 additional shares of Kafus common stock that it owned as a fee for structuring the financing of the CanFibre project. Upon converting the preferred stock and exercising the warrants, ECT will hold nine million shares of common stock, or 32 percent of Kafus' outstanding common stock.
"This transaction complements ECT's strategy to bring a broad array of energy and financial resources and expertise to energy-intensive industries," said Kenneth D. Rice, chairman and CEO, ECT-North America. "We are confident that this transaction will lead to further opportunities with Kafus and CanFibre."
Headquartered in Canada, Kafus Capital Corporation is the parent company to the CanFibre Group Ltd. Kafus is in the development stage of becoming a global low-cost producer of commodity-style products based entirely on the use of post-consumer and industrial wastes and other non-conventional production raw materials. Kafus is traded on the OTC Bulletin Board under the symbol "KFSSF," and on the Canadian Dealing Network under the symbol "KFSS."
CanFibre Group Ltd. engages in the worldwide development of manufacturing plants to produce wood panel products, such as MDF, from 100 percent recycled dry waste. CanFibre's MDF is North America's first "green" panel board. It is produced from materials disposed in landfills without the use of conventional Urea Formaldehyde resins, a growing environmental concern for current MDF producers worldwide. CanFibre is traded on the Canadian Dealing Network under the symbol "CFGL."
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $19 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest purchaser and marketer of natural gas and the largest non-regulated marketer of electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns a majority interest in Enron Global Power & Pipelines L.L.C., which is owner and manager of operating power plants and natural gas pipelines around the world; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind renewable energy worldwide. Enron is traded on the NYSE under the ticker symbol "ENE."
ECT has acquired the forementioned Kafus Securities for investment purposes in connection with the financing of the CanFibre Project in Riverside, California. ECT has no current intention to acquire additional securities of Kafus, however ECT may in the future acquire additional securities in the capital of Kafus in the market, pursuant to private agreements, or may sell, convert or exercise and sell certain of its Kafus securities depending on the circumstances then prevailing in each case in accordance with applicable laws.
For additional information please contact:
Terrie James
713-853-7727
|
