VANCOUVER, July 29 /CNW/ - Ainsworth Lumber Co. Ltd. (TSX: ANS) (the "Company") announced today that it has successfully completed its previously announced recapitalization transaction (the "Recapitalization") after receiving all necessary court, securityholder, term lender and regulatory approvals.

The Recapitalization became effective as of June 29, 2008. The Recapitalization was overwhelmingly approved on June 24, 2008 at meetings of the holders of the Company's common shares and holders of its senior unsecured notes. Of the 93% of the shares represented at the meeting, 99.99% voted in favour of the Recapitalization. At the noteholders meeting, 82% of the US$824 million principal amount of senior unsecured notes were represented and 100% of the votes cast were in favour of the Recapitalization. The plan of arrangement giving effect to the Recapitalization was approved by the Supreme Court of British Columbia on July 25, 2008.

As a result of the Recapitalization, 100 million new common shares (which includes approximately 9.5 million new common shares to be issued upon exercise of a special class of unlisted warrants (with a nil strike price) held by certain noteholders) have now been issued to (i) holders of its former common shares as of July 28, 2008 on the basis of approximately 0.273 new common shares for each former common share (4.0 million shares in aggregate) and (ii) holders of its former senior unsecured notes which were cancelled under the Recapitalization and certain backstop parties in connection with the Recapitalization (96.0 million shares in aggregate). The new common shares will be posted for trading on the TSX under the symbol "ANS" on Friday, August 1, 2008.

Under the Recapitalization, the Company also issued warrants (with a nil strike price) to holders of its former common shares which will entitle them to receive additional new common shares representing 8% of the new common shares on a fully diluted basis if the Company's equity market capitalization exceeds US$1.2 billion within five years of the effective date of the Recapitalization. The new warrants will be posted for trading on the TSX under the symbol "ANS.WT" on Friday, August 1, 2008.

As part of the Recapitalization, the Company also enhanced its liquidity by raising US$200 million through the issuance of new 11% senior unsecured notes due 2015 (the "Notes") and reduced its total debt by US$464 million (from US$985 million to US$521 million) through the cancellation of all five series of its former senior unsecured notes in exchange for the common shares described above, and the issuance of an additional US$150 million of Notes.

Robert Allen, the CFO of Ainsworth, said that the Company's new board of directors appointed under the Recapitalization effective today will be meeting shortly to review management and governance matters.

Ainsworth Lumber Co. Ltd.

Suite 3194, Bentall 4

P.O. Box 49307

1055 Dunsmuir Street

Vancouver, B.C. V7X 1L3

Telephone: (604) 661-3200

Facsimile: (604) 661-3201

Forward-looking information provided in this news release relating to the Company's expectations regarding Recapitalization and liquidity contains forward-looking statements made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. The Company believes that expectations reflected in such information are reasonable, but no assurance is given that such expectations will be correct. Forward-looking information is based on the Company's beliefs and assumptions based on information available at the time the assumption was made and on management's experience and perception of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances. Investors are cautioned that there are risks and uncertainties related to such forward-looking information and actual results may vary. The forward-looking information is made as of the date of this news release and the Company assumes no obligation to update or revise it to reflect new events or circumstances, except as explicitly required by securities laws.