Karta Halten starts tender offer, solicitation for Domtar notes

Chicago, Aug. 9 – Karta Halten BV announced that its wholly owned subsidiary Perl Merger Sub Inc., an affiliate of Paper Excellence BV, has launched offers to purchase for cash any and all of Domtar Corp.’s outstanding $250 million 6¼% senior notes due 2024 (Cusip: 2573359AJ3) and $250 million 6¾% notes due 2042 (Cusip: 257559AK0), according to a press release.

For each $1,000 note from either series, noteholders will receive a total tender consideration of $1,012.50, inclusive of a $50 early tender payment. The tender offer consideration after the early deadline is $962.50 per note.

The offers and consent solicitations are being made in connection with the pending acquisition of Domtar by the Paper Excellence group.

Tendering noteholders will also be giving consents to eliminate substantially all of the restrictive covenants, to eliminate certain events of default, amend the definition of change of control to exclude the merger and related transactions and amend the issuer reporting covenant to remove the requirement to file bondholder reports with the Securities and Exchange Commission and make other changes appropriate for a private company.

Noteholders can also consent without tending their notes. Consenting noteholders who do not tender their notes for the consent solicitation relating to the change of control will receive $2.50 per $1,000 note.

The early tender deadline and the consent solicitation deadline is 5 p.m. ET on Aug. 20, also the withdrawal deadline.

The offers are scheduled to expire at midnight ET on Sept. 3.

Barclays, BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC, and Wells Fargo Securities, LLC are the dealer managers for each of the offers and solicitation agents for the consent solicitation.

Global Bondholder Services Corp. is the information agent (212 430-3774, 866 807-2200, contact@gbsc-usa.com).

The offer is conditioned upon the closing of the merger. Payment will be made concurrently with or prior to the closing of the merger. This is expected to take place in the fourth quarter of 2021, but the outside date is Feb. 10, 2022.

Domtar makes paper and other fiber-based products and is based in Fort Mill, S.C. Paper Excellence is a pulp and paper manufacturer with headquarters in Richmond, B.C.

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