Domtar launches change-of-control tender offer for 9½% debentures

By Jennifer Chiou

New York, April 4 - Domtar Corp. announced that its subsidiary Domtar Inc. started a change-of-control offer for its $125 million of 9½% debentures due 2016.

The Montreal, Quebec-based paper company said that the offer is required under the indenture, which obliges Domtar make an offer to purchase the debentures following a "change-of-control triggering event."

On March 7, as a result of the combination of the fine paper business and related assets of Weyerhaeuser Co. with Domtar Inc., one person came to hold more than 35% of Domtar Inc.'s outstanding common shares. In addition, Moody's Investor Services lowered its rating on the company within 90 days of the public announcement of the transaction due to a change in methodology for rating North American forest product companies.

For each $1,000 principal amount, the company said it will pay $1,010 plus accrued interest up to but excluding the payment date.

The offer ends at midnight ET on May 4.

Georgeson Inc. is the information agent (800 445-1790 or call collect 212 440-9800).

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