MIRA INFORM REPORT

 

 

Report Date :

09.08.2013

 

IDENTIFICATION DETAILS

 

Name :

TEMBEC INC

 

 

Registered Office :

800 Bld Rene Levesque, Ste 1050, Montreal, Quebec H3B 1X9

 

 

Country :

Canada

 

 

Year of Establishment :

1972

 

 

Legal Form :

Public Company

 

 

Line of Business :

Subject engaged in the production and sale of forest, pulp, and paper products

 

 

No. of Employees :

3,700

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

Payment Behaviour :

Slow but correct

Litigation :

Clear

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – March 31st, 2013

 

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

 Canada

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

CANADA - ECONOMIC OVERVIEW

 

As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production, and affluent living standards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban. The 1989 US-Canada Free Trade Agreement (FTA) and the 1994 North American Free Trade Agreement (NAFTA) (which includes Mexico) touched off a dramatic increase in trade and economic integration with the US its principal trading partner. Canada enjoys a substantial trade surplus with the US, which absorbs about three-fourths of Canadian exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, uranium, and electric power. Given its great natural resources, highly skilled labor force, and modern capital plant, Canada enjoyed solid economic growth from 1993 through 2007. Buffeted by the global economic crisis, the economy dropped into a sharp recession in the final months of 2008, and Ottawa posted its first fiscal deficit in 2009 after 12 years of surplus. Canada's major banks, however, emerged from the financial crisis of 2008-09 among the strongest in the world, owing to the financial sector''s tradition of conservative lending practices and strong capitalization. Canada achieved marginal growth in 2010-12 and plans to balance the budget by 2015. In addition, the country''s petroleum sector is rapidly becoming an even larger economic driver with Alberta''s oil sands significantly boosting Canada''s proven oil reserves, ranking the country third in the world behind Saudi Arabia and Venezuela.

 

Source : CIA

 

 

COMPANY NAME & ADDRESS

 

Company name:            TEMBEC INC.

 

Address:                       800 Bld Rene Levesque, Ste 1050, Montreal, Quebec H3B 1X9

                                     Canada

 

Telephone:                    +1 517-871-0137

 

Fax:                              +1 517-397-0896

 

Website:                       www.tembec.com

 

Corporate ID#:               4461851

 

State:                           Federal

 

 

COMPANY SUMMARY

 

Judicial form:                 Public Company (TMX = TMB)

 

Date incorporated:        01-16-2008

 

Date founded:              1972

 

Stock:                           100,000,000 shares issued and outstanding.

 

Value:                           No par value

 

Name of manager:         James M. LOPEZ

 

 

ACTIVITIES & OPERATIONS

 

IST

 

Business:

 

Holding Company

Tembec Inc., an integrated forest products company, with its subsidiaries, engages in the production and sale of forest, pulp, and paper products worldwide.

The group operates in four segments: Forest Products, Specialty Cellulose and Chemical Pulp, High-Yield Pulp, and Paper.

The Forest Products segment produces and sells a range of forest products comprising spruce, pine, and fir lumber; specialty wood; and engineered wood to large retailers, industrial end-users, and distributors.

 

 

The Specialty Cellulose and Chemical Pulp segment engages in the manufacture and marketing of specialty cellulose and chemical pulps, including the transformation and sale of resins and pulp by-products.

The High-Yield Pulp segment is involved in the manufacture and marketing of hardwood high-yield paper pulps.

The Paper segment produces and sells coated bleached board for use in commercial printing; and newsprint for the publication of daily newspapers. Tembec Inc. was founded in 1972 and is headquartered in Montreal, Canada

 

 

Staff:    3,700

 

Operations & branches:

 

At the headquarters, we find the corporate office, on lease.

 

The Company maintains a branch located:

 

10 Chemin Gatineau

Temiscaming, Quebec J0Z 3R0 – Canada

 

 

SHAREHOLDERS & MANAGERS

 

Shareholders:

 

The Company is listed with the Toronto Stock Exchange under symbol TMB.

 

 

Management:

 

James M. LOPEZ has been the Chief Executive Officer and President of Tembec Inc. since January 26, 2006 and January 27, 2006 respectively and of its subsidiary Tembec Industries, Inc.

Mr. Lopez served as an Executive Vice President and President of Forest Products Group of Tembec Inc. from August 2003 to January 26, 2006 and of its subsidiary Tembec Industries, Inc. Mr. Lopez served as an Executive Vice President and Resources Management of Tembec Inc. and Tembec Industries, Inc. from 1999 to August 2003. Mr. Lopez served as Chairman of the Ontario Forest Industry Association (OFIA), of the Forest Engineering Research Institute of Canada (FERIC), and of WoodWorks Canada Corp. He serves as Vice Chairman of the Forintek Canada Corp. He has been Director of Tembec Inc. since February 29, 2008 and has been Director of Tembec Industries, Inc. since January 2006. Mr. Lopez joined Tembec in 1989 and has held a number of operating and staff roles of increasing responsibility, including the management of a number of its business units. He also served as Director of Tembec Inc. from January 26, 2006 to February 29, 2008.

He holds Bachelor Degree of Economics from California University of Pennsylvania.

 

Dennis ROUNSVILLE has been Executive Vice President of Tembec Inc. since January 27, 2006 and serves as President of Forest Products Group.

 

 

Directors include James M. LOPEZ, Norman M. BETTS, Lorie WAISBERG,

Francis Matthew SORICCO, James E. BRUMM, David John STEUART, James Norris CHAPMAN, James V. CONTINENZA, Michel DUMAS, Jacques LEDUC, Pierre LORTIE.

 

As far as we know, they are involved in other corporations, including:

 

 

Subsidiaries

And partnership:

 

- INDUSTRIES TEMBEC INC

- TEMBEC COMPANIE DE CONSTRUCTION INC

- PLACEMENTS TEMBEC

 

 

FINANCIALS

 

On attachment:

- 10K 2012 (fiscal year ending September 2012)

- 3rd 10Q 2013

 

On August 1, 2013, Tembec Inc. reported consolidated unaudited earnings results for the third quarter and nine months ended June 29, 2013.

For the quarter, the company reported sales of CAD 399 million compared to

CAD 415 million a year ago. Operating earnings were CAD 17 million compared to CAD 14 million a year ago. Net loss was CAD 4 million compared to CAD 5 million a year ago. Basic and diluted net loss per share was CAD 0.04 compared to CAD 0.05 a year ago. Cash flow from operating activities was CAD 16 million compared to CAD 16 million a year ago. Additions to property, plant and equipment was CAD 1 million compared to CAD 24 million a year ago.

Operating earnings before depreciation, amortization and other items (adjusted EBITDA) was CAD 30 million compared to adjusted EBITDA of CAD 27 million a year ago and adjusted EBITDA of CAD 24 million in the prior quarter.

For the nine months, the company reported sales of CAD 1,182 million compared to CAD 1,223 million a year ago. Operating earnings were CAD 16 million compared to CAD 9 million a year ago. Loss before income taxes were

CAD 24 million compared to CAD 18 million a year ago.

Net loss was CAD 40 million compared to CAD 35 million a year ago. Basic and diluted net loss per share was CAD 0.40 compared to CAD 0.35 a year ago.

Cash flow from operating activities was CAD 26 million compared to CAD 2 million a year ago.

 

 

Banks:  Banque de Montreal

                       

 

 

LEGAL FILINGS

 

 

Legal filings & complaints:

 

As of today date, there is no legal filing pending with the Courts.

 

 

Secured debts summary:   Several

 

 

COMPANY CREDIT HISTORY

 

Domestic credit history:

 

 

National Credit Bureaus gave a medium credit rating.

 

According to our credit analysts, during the last 6 months, domestic payments were made with an average of 10+ days beyond terms.

 

 

Other comments:

 

 

The Company reported losses since several years.

 

The Company is in good standing.

This means that all local and federal taxes were paid on due date.

Last report was filed on 03-28-2013.

 

The risk is medium.

 

 

Our opinion:

 

 

A business connection may be conducted but we suggest you to check regularly the way of payments.

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.11

UK Pound

1

Rs.94.77

Euro

1

Rs.81.54

 

INFORMATION DETAILS

 

Report Prepared by :

NLM

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.