Tembec to sell flooring assets; shares fall

Mon Nov 21, 2011 3:24pm EST
 
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(Reuters) - Canadian forest products maker Tembec Inc (TMB.TO: Quote) will sell some of its non-core assets to a private company for C$13 million ($12.5 million) as it focuses on its core business of production of wood, pulp, papers, paperboard and chemical products.

The Quebec-based company's shares were down 6 percent at C$2.52 -- their lowest in five weeks -- in afternoon trading on the Toronto Stock Exchange.

Tembec said it planned to close a hardwood flooring plant in Huntsville, Ontario which will lead to 63 job cuts.

The company said it will take a related one-time charge of C$2 million, which will be reflected in its December-quarter results.

The plant, which generated sales of C$48 million in the last one year, will cease operations in January 2012.

However, Tembec's hardwood sawmill operations in Huntsville will remain unaffected by the transaction, it said in a statement.

($1 = 1.041 Canadian Dollars)

(Reporting by Ankur Banerjee in Bangalore; Editing by Maju Samuel)