By staff - Country Activist, June 1986
Maxxam, which bought out Pacific Lumber Company of Scotia just four months ago, will double its timber cutting to help pay off their debt resulting from the buyout. Environmentalists are infuriated with the plan, especially since the old owners had long been a model for sustained-yield forestry through selective cutting methods. Now, according to Save-the-Redwoods director John DeWitt, “they’re chopping more trees for the bucks … we deplore the action.”
Maxxam has transferred most of the buyout debt, $550 million, to Pacific Lumber’s balance sheet, thus requiring the previously solvent subsidiary to change its methods of doing business. Under the refinancing plan, PL will have to make cash payments of nearly $40 million a year for the first three years, and $43 million a year after that.
To meet these requirements, in addition to doubling the timber cutting, the company plans on dumping the following assets:
- a 100,000 sq.ft. office building in downtown San Francisco;
- 4,000 acres of San Mateo county timberland;
- 3,400 acres of farmland in Sacramento Valley;
- transfer of welding operations to other subsidiaries;
- more than 4,000 of its 189,000 acres of redwood and Doug fir timberland.
Under the increased cutting, which Pacific Lumber will accomplish through adding jobs for a short while, like their recent purchase of a mill in Carlotta to help process the wood, P-L predicts the timber supply in Humboldt County will last for another 20 years.
Thanks a lot, Maxxam …