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Domtar starts consent solicitations, change-of-control offers for two series of notes
Chicago, Dec. 2 – Domtar Corp. has started consent solicitations and, separately, change-of-control offers for its $250 million outstanding 6¼% notes due 2024 (Cusip: 257559AJ3) and its $250 million outstanding 6¾% senior notes due 2044 (Cusip: 257559AK0), according to a press release.
As background, the company recently closed its announced merger with Paper Excellence BV, a subsidiary of Karta Halten BV. It is now a private company.
Accordingly, the company is soliciting consents to amend the indenture governing the notes to remove the requirement to publicly file bondholder reports with the Securities and Exchange Commission and make other changes appropriate for a private company.
Noteholders holding at least a majority of the notes must consent to amend the notes. The record date is 5 p.m. ET on Dec. 1.
Consenting bondholders will be entitled to a shared payment of $1.25 million for each series. If all holders consent, the payment would be around $5 per $1,000 bond. If only the majority consents, the payment is expected to be closer to $10 per $1,000 bond.
The consent solicitations will expire at 5 p.m. ET on Dec. 10. The consent payment will be paid promptly after the expiration time if the requisite consents are obtained.
Concurrently with the consent solicitations, the company is offering to buy the notes because of the change of control.
The company is offering to buy the notes at 101, plus interest up to the date of purchase.
The change-of-control offers will expire at midnight ET on Jan. 3.
Barclays (212 528-7581, 800 438-3242), BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC are the solicitation agents.
Global Bondholder Services Corp. can also be contacted (212 430-3774, 866 807-2200, contact@gbsc-usa.com).
Domtar makes paper and other fiber-based products and is based in Fort Mill, S.C.
Paper Excellence is a diversified maker of pulp and paper, based in the Netherlands.
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