MEXICO – Recently, Duraplay, S.A.P.I. de C.V., a Mexican company, and Forestal Terranova México, S.A. DE C.V., entered into an asset purchase agreement for the sale of the wood based panel Plant owned by the latter, a Mexican subsidiary of Masisa S.A., located in Chihuahua, Mexico.

The sale encompasses the land, buildings, machinery, and equipment associated with the Chihuahua Plant of the aforementioned company.

The total transaction amount is USD 18 million, with payments structured as follows:

Duraplay will pay USD 9 million, plus the applicable VAT, to Masisa on the same date as the signing of the purchase agreement.

An additional USD 7.5 million, plus the applicable VAT, will be paid by Duraplay to Masisa approximately 60 days after the mutually agreed-upon transition period. This payment is secured by a mortgage on the property being sold.

USD 1.5 million will be held in a trust at a financial institution, serving as a guarantee for the fulfillment of specific conditions outlined in the purchase agreement. These funds will be released to the Seller within up to 12 months from the end of the aforementioned transition period, contingent upon meeting the specified conditions.

The proceeds from this transaction will primarily be utilized by Masisa to retire financial debt, enhancing the company’s financial flexibility in the current economic landscape and supporting the continued implementation of its strategy focused on value-added products and services.

While the company is evaluating the accounting impact of this transaction, it is anticipated to negatively affect the company’s results by approximately USD 2.0 million before taxes. Additionally, deferred taxes of around USD 8.5 million will need to be reversed. Nevertheless, the transaction is expected to have a positive impact on the company’s cash flow.

The sale of the particleboard Plant aligns with the company’s long-term strategy to concentrate on the sale of value-added products and services, given that the Chihuahua Plant predominantly produces commodity products. Despite this shift, the company will sustain its presence in the Mexican market by directly selling products and services produced in its Chilean plants.

The Chihuahua plant features a PB-MDP board production line with a potential installed capacity of 220,000 m3 per year.