TimberWest Forest Corp. Announces $150 Million Private Placement and Rights offering Effecting Bank Refinancing

VANCOUVER, Dec 13, 2008 /PRNewswire-FirstCall via COMTEX/ —-TimberWest Forest Corp. (TSX: TWF.UN) (“TimberWest” or the “Company”) announced today a rights offering (the “Rights Offering”) pursuant to which the Company will distribute rights (“Rights”) that will entitle existing holders of Stapled Units of the Company (“Unitholders”) to purchase up to $50 million aggregate principal amount of 9% extendible convertible debentures of the Company (“Debentures”).

The Company also announced that it has entered into an investment agreement (the “Investment Agreement”) with two wholly-owned subsidiaries of British Columbia Investment Management Corporation (together, “bcIMC”) under which bcIMC has agreed to purchase $100 million principal amount of convertible debentures of the Company (“Private Debentures”) having economic terms similar to those of the Debentures (the “Firm Commitment”). In addition, bcIMC has committed to purchase an additional amount of Private Debentures equal to the aggregate principal amount of the Debentures not subscribed for under the Rights Offering (the “Standby Commitment” and, together with the Firm Commitment, the “Private Placement”).

The net proceeds of the Rights Offering and Private Placement will be used by the Company to reduce the indebtedness of the Company under its bank credit facilities and for general corporate purposes.