Weyerhaeuser Mulls RIET

Jon Robinson
July 07, 2009

With its stock losing nearly 55 percent in the past 10 months, Weyerhaeuser reopens the potential of becoming a low-tax investment trust (RIET conversion), which also typically guarantees higher dividends. At the start of July, Weyerhaeuser announced it would again cut its quarterly dividend, this time by 80 percent, which would save the company well over US$100 million.

While it sent most of its high-quality printing papers over to Montreal-based Domtar, after the two companies merged in March 2007, Weyerhaeuser remains a large global producer of newsprint and packaging substrates. However, the forest-products giant is primarily blaming its yearlong slump on the U.S. housing market.

"In light of these conditions, this dividend decision enhances our current liquidity and provides for more financial flexibility, including a possible REIT conversion should the board make that decision in the future," said CEO Dan Fulton. The company decided to stay away from becoming an investment-trust just last May. Weyerhaeuser lost US$264 million in its last quarter and more than US$1 billion in the prior quarter. It will report its second quarter results on July 31.

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