Sino-Forest creditors to take control; sale shelved

TORONTO (Reuters) - Sino-Forest Corp SNOFS.UL said on Tuesday it terminated a proposed asset sale, in favor of a plan that calls for the company's creditors acquire all of its forestry assets.

The China-focused forestry company's shares plummeted in June 2011 after a short-seller accused it of exaggerating the size of its forestry assets. The company, whose stock has since been de-listed by the Toronto Stock Exchange, was granted protection from creditors by a Canadian court in March.

At the time, the company said it would attempt to sell its assets. In the event a credible buyer did not emerge, however, the company's restructuring plan would let noteholders acquire nearly all of its assets.

In a statement late on Tuesday, Sino-Forest said it would transfer all its assets, other than certain excluded assets, to a newly formed entity owned and controlled by its creditors, as part of a full and final settlement of all creditor claims against the company. (Reporting by Euan Rocha; Editing by Steve Orlofsky)