Tembec unit begins tender offer, consent solicitation for 11¼% notes

By Marisa Wong

Madison, Wis., Sept. 16 – Tembec Inc.’s wholly owned subsidiary, Tembec Industries Inc., has begun a cash tender offer and consent solicitation for its outstanding $305 million of 11¼% senior secured notes due 2018, according to a press release.

The tender offer and consent solicitation will expire at 11:59 p.m. ET on Oct. 14.

The tender offer is for any and all outstanding notes.

The cash consideration to be offered per $1,000 principal amount of notes tendered is $1,068.28.

Holders who tender their notes at or before 5 p.m. ET on Sept. 29, the early tender deadline, will also receive an early tender payment of $10.00 per $1,000 principal amount, for a total consideration of $1,078.28.

Holders will also receive accrued interest to, but not including, the applicable payment date for the notes.

In connection with the tender offer, the company is soliciting consents from noteholders to amend some redemption provisions and eliminate substantially all of the restrictive covenants and a number of the events of default contained in the indenture governing the notes. The company needs consents from holders of a majority in principal amount of the outstanding notes to adopt these base changes.

In addition, if adopted, the proposed amendments would provide for the release of the liens on the collateral securing the company’s obligations with respect to the notes. Adoption of the collateral amendments requires the consent of holders of at least 66 2/3% of the outstanding principal amount of notes.

Holders who tender their notes will be deemed to consent to all of the proposed amendments, and holders may not deliver consents to the amendments without tendering their notes.

Notes tendered may be withdrawn and the related consents may be revoked at any time at or before 5 p.m. ET on Sept. 29 but not after.

The company may choose to accept notes tendered at or prior to the early tender deadline on an early acceptance date that falls between the early deadline and the expiration time.

The tender offer is subject to a financing condition.

Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 967-4604 or 212 269-5550) is the information agent and tender agent.

Tembec is a Montreal-based manufacturer of forest products, including lumber, pulp, paper and specialty cellulose.

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