Domtar Corporation announced that it is commencing a cash tender offer for an aggregate principal amount of its outstanding 5.375% Notes due 2013 (the "First Priority Notes").
7 1/8% Notes due 2015 (the "Second Priority Notes"), 7.875% Notes due 2011 (the "Third Priority Notes") and 10.75% Notes due 2017 (the "Fourth Priority Notes" and together with the First Priority Notes, Second Priority Notes and Third Priority Notes, the "Notes") such that the maximum aggregate consideration for Notes purchased in the tender offer, excluding accrued and unpaid interest, will not exceed $350,000,000 (the "Maximum Payment Amount") and the maximum aggregate consideration for all Fourth Priority Notes purchased in the tender offer, excluding accrued and unpaid interest, will not exceed $75,000,000 (the "10.75% Notes Payment Cap"). The terms and conditions of the tender offer are described in an Offer to Purchase, dated May 21, 2010 (the "Offer to Purchase"), and a related letter of transmittal, which are being sent to holders of Notes.
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Aggregate Early Total
Acceptance Principal Tender Consi-
CUSIP Title of Priority Amount Purchase Payment dera-
Number Security Level Outstanding Price(1) (1) tion(1)
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257559 AB0 5.375% Notes 1 $310,431,000 $1,000 $50 $1,050
due 2013
257559 AC8 7 1/8% Notes 2 $399,723,000 $1,020 $50 $1,070
due 2015
257559 AA2 7.875% Notes 3 $134,752,000 $1,035 $50 $1,085
due 2011
257559 AG9 10.75% Notes 4 $400,000,000 $1,160 $50 $1,210
due 2017
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(1)Per $1,000 principal amount of Notes accepted for purchase.
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Holders of Notes must validly tender and not validly withdraw their Notes on or prior to 5:00 p.m., New York City time, on June 4, 2010, unless extended or earlier terminated (the "Early Tender Time") in order to be eligible to receive the applicable Total Consideration, as set forth in the table above. Holders of Notes who validly tender their Notes after the Early Tender Time and on or prior to the Expiration Time (as defined below) will be eligible to receive only the applicable Purchase Price, which is equal to the applicable Total Consideration minus the Early Tender Payment.
As set forth in the table above. In addition to the applicable Total Consideration or Purchase Price, as the case may be, holders whose Notes are accepted for purchase by the Company in the tender offer will receive accrued and unpaid interest on their purchased Notes to, but not including, (i) in the case of First Priority Notes accepted for purchase on the Early Acceptance Date (as defined below), the Early Payment Date (as defined below), and (ii) in the case of all other Notes accepted for purchase, the Payment Date (as defined below).
The tender offer is scheduled to expire at 12:00 midnight, New York City time, on June 18, 2010, unless extended or earlier terminated (such date and time, as the same may be extended, the "Expiration Time"). As set forth in the Offer to Purchase, validly tendered Notes may be validly withdrawn at any time on or prior to 5:00 p.m., New York City time, on June 4, 2010, unless extended.
Upon the terms and subject to the conditions of the tender offer, the Company expects to accept for purchase any First Priority Notes validly tendered (and not withdrawn) on or prior to the Early Tender Time promptly after the Early Tender Time (the "Early Acceptance Date") and expects that it will pay the Total Consideration for such First Priority Notes on the business day after the Early Acceptance Date (the "Early Payment Date"). Upon the terms and subject to the conditions of the tender offer, the Company expects to accept for purchase all other Notes validly tendered (and not withdrawn) on or prior to the Expiration Time promptly after the Expiration Time and expects that it will pay the Total Consideration or Purchase Price, as applicable, for such Notes on the business day following the date that the Notes are accepted (the "Payment Date").
The Company may waive, increase or decrease the Maximum Payment Amount or the 10.75% Notes Payment Cap at its sole discretion. If the aggregate consideration, excluding accrued and unpaid interest, that would be payable for all Notes that are validly tendered and not validly withdrawn on or prior to the Expiration Time would exceed the Maximum Payment Amount, the Company will accept for purchase Notes that have been so tendered in accordance with the applicable Acceptance Priority Levels, subject, in the case of the Fourth Priority Notes, to the 10.75% Notes Payment Cap.
If the aggregate consideration, excluding accrued and unpaid interest, that would be payable for all tendered Notes of the Acceptance Priority Levels (as set forth in the table above) to be accepted for purchase exceeds the Maximum Payment Amount, Notes of the lowest Acceptance Priority Level to be accepted for purchase will be pro rated (with adjustments downward to avoid the purchase of Notes in a principal amount other than $1,000 or an integral multiple thereof), such that the aggregate consideration payable for all Notes accepted for purchase, excluding accrued and unpaid interest, does not exceed the Maximum Payment Amount and, in the case of Fourth Priority Notes, such that the aggregate consideration for all Fourth Priority Notes accepted for purchase, excluding accrued and unpaid interest, does not exceed the 10.75% Notes Payment Cap. The Company's obligation to consummate the tender offer is conditioned upon the satisfaction or waiver of certain conditions described in the Offer to Purchase.
The Company has engaged Banc of America Securities LLC and Goldman, Sachs & Co. to act as dealer managers in connection with the tender offer. Questions regarding the tender offer may be directed to Banc of America at (646) 855-3401 (collect) or (888) 292-0070 (U.S. toll-free) or to Goldman Sachs at (212) 902-5183 (collect) or (800) 828-3182 (U.S. toll-free). Requests for documentation may be directed to Global Bondholder Services Corporation, the information agent and depositary for the tender offer, at (212) 430-3774 (for banks and brokers) or (866) 470-3700 (U.S. toll-free).
This press release is neither an offer to purchase nor a solicitation of an offer to sell the Notes or any other security. The tender offer is being made only by the Offer to Purchase and the related letter of transmittal. The offer is not being made to noteholders in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the offer is required to be made by a licensed broker or dealer, it shall be deemed to be made on behalf of the Company by the dealer managers or one or more registered brokers or dealers licensed under the laws of such jurisdiction.
About Domtar
Domtar Corporation (NYSE/TSX:UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade, fluff and specialty pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing as well as converting and specialty papers including recognized brands such as Cougar(R), Lynx(R) Opaque Ultra, Husky(R) Opaque Offset, First Choice(R) and Domtar EarthChoice(R) Office Paper, part of a family of environmentally and socially responsible papers. Domtar owns and operates Domtar Distribution Group, an extensive network of strategically located paper distribution facilities. Domtar also produces lumber and other specialty and industrial wood products. The Company employs over 10,000 people. To learn more, visit www.domtar.com.
Forward-Looking Statements
All statements in this press release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the latest Annual Report on Form 10-K filed with the SEC as updated by the Company's latest Quarterly Report on Form 10-Q. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.