The underwriters have also been granted an over-allotment option, exercisable within 30 days, to purchase up to an additional 1,200,000 common shares from the corporation. If the over-allotment option is exercised, the corporation will use the proceeds from the sale of these additional shares to subscribe for additional units of Kruger Products L.P., which will result in KP Tissue Inc. having up to a 17.6% interest in Kruger Products L.P.
The remaining 84.3% interest in Kruger Products L.P. (or 82.4% if the over-allotment option is exercised in full) is held by Kruger Products 2010 L.P. (Kruger 2010), a wholly owned subsidiary of Kruger Inc. In connection with the offering, Kruger 2010, Kruger Products L.P., and the corporation entered into an Exchange Agreement under which Kruger 2010 may exchange at any time its units of Kruger Products L.P. for common shares of the corporation on a one-for-one basis, subject to adjustment in accordance with the Exchange Agreement. As of Dec. 13, 2012, Kruger 2010 is the registered holder of 43,009,999 units exchangeable for 43,009,999 common shares of the corporation, which would represent approximately 84.3% of the corporation's outstanding common shares.
KP Tissue Inc. is a corporation created with the sole purpose of acquiring an equity interest in Kruger Products L.P., initially, with the proceeds from the initial public offering of its common shares. Kruger Products L.P. is a producer of tissue products for household, industrial, and commercial use.
TAPPI
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