Doman reorganization plan supported by creditors

New York, June 7 - Doman Industries Ltd. said creditors voted "overwhelmingly" to approve its plan of compromise and arrangement.

The Duncan, B.C. forest products company said 97.75% of creditors by number holding 99.98% of the total value of claims supported the plan.

The proposed plan calls for the solid wood assets to be organized under the new Lumberco unit, which will be renamed later. Pulp assets would be held under another new unit, Pulpco, which will also be renamed later. Lumberco will take over as the public parent company. Doman plans to list Lumberco's stock with the Toronto Stock Exchange.

Doman's and its subsidiaries' unsecured creditors, including its pre-petition trade debt creditors, who do not choose cash will have their claims converted into 75%-87.5% of the equity of Lumberco, according to the plan and get warrants to buy another 12.5% of the common stock.

The debt held by the secured noteholders will be refinanced in full through a warrants offering to the unsecured claimsholders and a private placement to Tricap, affiliates of Merrill Lynch Investment Managers, Quadrangle Group LLC and Amaranth LLC. Secured noteholders will get new notes with a face value of $221 million with a 15% interest rate and 25% of Lumberco's common stock.

The plan calls for existing shareholders to get warrants to buy up to a 10% stake in the reorganized company.

Doman filed for protection under the Companies' Creditors Arrangement Act on Nov. 7, 2002.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.