Item 7.01. Regulation FD Disclosure.
As previously announced on May 11, 2021, Paper Excellence and Domtar Corp.
(NYSE: UFS) (TSX: UFS) will enter into a strategic business combination under
which the Paper Excellence group of companies will acquire all of the issued and
outstanding shares of Domtar common stock for $55.50 per share, in cash. The
transaction is still expected to close in the second half of this year, subject
to Domtar shareholder approval, receipt of the required regulatory approvals and
other customary closing conditions. Domtar has scheduled its virtually-held
special meeting of stockholders on July 29, 2021, at 9:00 a.m. Eastern Time.
On July 9, 2021, Paper Excellence, announced that Paper Excellence and its
subsidiaries have received a debt commitment letter from leading financial
institutions for the commitment of an aggregate of $1.95 billion of financing.
The $1.95 billion in financing consists of a five-year senior secured
asset-based revolving facility in the aggregate principal amount of
$400 million; a seven-year senior secured term loan facility in an aggregate
principal amount of $775 million; and a seven-year senior secured bridge
facility in an aggregate principal amount of $775 million. Paper Excellence
announced that the proceeds of this financing are expected to be used to
consummate the acquisition of Domtar by Paper Excellence and other transactions
contemplated by that acquisition. This may include an offer to purchase and/or
solicitation of waivers of the change of control provisions with respect to the
existing notes of Domtar and/or a change of control offer to purchase the
existing notes of Domtar after the consummation of the acquisition, if
necessary.
Paper Excellence announced that the commitments under the previously-referenced
debt commitment letter expire upon the date that is five business days after the
latest end date in the merger agreement (which is February 10, 2022 (subject to
extension)) or, if earlier, (a) the date on which the merger agreement has
terminated in accordance with its terms and/or (b) the date of the consummation
of the merger and payment of the consideration therefor and related transactions
(but not, for the avoidance of doubt, prior to the consummation thereof) with or
without the funding or effectiveness of the applicable facilities. The
definitive documentation governing the debt financing has not been finalized
and, accordingly, the actual terms of the debt financing may differ from those
described above.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. This
communication may be deemed to be solicitation material in respect of the
proposed merger between Domtar and Karta Halten B.V. In connection with the
proposed merger, Domtar has filed a definitive proxy statement with the SEC.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT, BECAUSE IT CONTAINS
IMPORTANT INFORMATION. Security holders may obtain a free copy of the proxy
statement and other documents filed by Domtar with the SEC at
http://www.sec.gov. Free copies of the proxy statement and Domtar's other
filings with the SEC may also be obtained from Domtar. Free copies of documents
filed with the SEC by Domtar will be made available free of charge on Domtar's
investor relations website at
https://www.domtar.com/en/who-we-are/investors-governance/investors.
PARTICIPANTS IN THE MERGER SOLICITATION
Domtar and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from Domtar's stockholders in respect of the
proposed merger. Information about the directors and executive officers of
Domtar is set forth in Domtar's annual proxy, which was filed with the SEC on
March 25, 2021. Stockholders may obtain additional information regarding the
interest of such participants by reading the proxy statement regarding the
proposed merger.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this article, and other written and oral
statements made from time to time by us or on our behalf are based on current
expectations, projections about operations, industry conditions, financial
condition, and liquidity, may not relate strictly to historical or current facts
and may contain forward-looking statements that reflect our current views with
respect to future events and financial performance including the proposed
transaction between Domtar and Parent. As such, they are considered
"forward-looking statements" which provide current expectations or forecasts of
future events. Such statements can be identified by the use of terminology such
as "anticipate", "believe", "expect", "intend", "aim", "target", "plan",
"continue", "estimate", "project", "may", "will", "should" and similar
expressions. These forward-looking statements should be considered with the
understanding that such statements involve a variety of risks and uncertainties,
known and unknown, and may be affected by inaccurate assumptions. Consequently,
no forward-looking statement can be guaranteed and actual results may vary
materially. Many risks, contingencies and uncertainties could cause actual
results to differ materially from our forward-looking statements.
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