Ainsworth Lumber asks 7½% noteholders to skip change-of-control offer

By Angela McDaniels

Tacoma, Wash., Oct. 7 - Ainsworth Lumber Co. Ltd. began a consent solicitation for its 7½% senior secured notes due 2017, the goal of which is to avoid making a change-of-control offer for the notes.

The proposed amendments would modify some definitions contained in the note indenture so that the proposed acquisition of Ainsworth by Louisiana-Pacific Corp. and the designation by Louisiana-Pacific of members of Ainsworth's board of directors will not constitute a change of control and Ainsworth will not be required to make a change-of-control offer in connection with the acquisition, according to a company news release.

Ainsworth said it is making the consent solicitation at Louisiana-Pacific's request and expense.

The consent solicitation is conditioned on the receipt of consents for a majority of the outstanding notes.

Whether or not the requisite consents are obtained, once the acquisition is completed, Louisiana-Pacific will guarantee the notes.

Louisiana-Pacific is offering a consent fee of $2.50 per $1,000 principal amount of notes. Half of the consent fee will be paid promptly following the expiration of the consent solicitation, and the remaining 50% will be paid after the acquisition is completed. Ainsworth expects the acquisition to be completed by the end of 2013.

However, if the final consent payment is not paid by the earlier of (i) five business days after all of the conditions to the final consent payment are satisfied or waived and (ii) June 2, 2014, the indenture will revert back to its pre-amended state, and the reversion will be retroactive as if the proposed amendments had never become operative.

The consent solicitation will expire at 5 p.m. ET on Oct. 16.

Only holders of record as of 5 p.m. ET on Oct. 4 are eligible to deliver consents.

The solicitation agent is Goldman Sachs & Co. (212 902-6941 or 800 828-3182). The information and tabulation agent is Global Bondholder Services Corp. (212 430-3774 or 866 924-2200).

Ainsworth Lumber makes oriented strand board and is based in Vancouver, B.C.

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