Vancouver, British Columbia, Canada, 29 July 2008 – Ainsworth Lumber Co. Ltd. (TSX: ANS) has successfully completed its previously announced recapitalization transaction, after receiving all necessary court, securityholder, term lender, and regulatory approvals.

The Recapitalization was overwhelmingly approved on 24 July 2008 at meetings of the holders of the company’s common shares and holders of its senior unsecured notes and became effective 29 July 2008. Of the 93% of the shares represented at the meeting, 99.99% voted in favor of the Recapitalization. At the noteholders meeting, 82% of the USD 824 million principal amount of senior unsecured notes were represented and 100% of the votes cast were in favor of the Recapitalization. The plan of arrangement giving effect to the Recapitalization was approved by the Supreme Court of British Columbia on 25 July  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 28 July 2008, on the basis of approximately 0.273 new common shares for each former common share (4.0 million shares in aggregate) and to (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 01 August 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 USD 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 01 August 2008.

As part of the Recapitalization, the company also enhanced its liquidity by raising USD 200 million through the issuance of new 11% senior unsecured notes due 2015 and reduced its total debt by USD 464 million (from USD 985 million to USD 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 USD 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.