Doman noteholders propose refinancing secured debt, exchanging unsecured debt for equity

New York, Feb. 5 - Doman Industries Ltd. said that some unsecured noteholders have filed a term sheet outlining a proposed restructuring plan.

Under the plan, the company's secured notes would be refinanced in full through an offering of warrants and a private placement.

Some of the unsecured noteholders would participate in the private placement and backstop any warrants not sold.

All of the Duncan, B.C. forest products company's unsecured debt including trade debt would be converted to equity. Claims below a certain threshold would be paid in cash.

Existing shareholders will not receive any equity.

After the restructuring, Doman's debt would be the new secured notes, its working capital facility and inter-company debt.

Doman's pulp and solid wood assets would be separated into two new corporate groups, with the potential for further restructuring affecting some of the pulp assets.

Doman said the plan is expected to be filed with the court by March 2.

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