Paper Excellence on July 9 announced that Paper Excellence and its subsidiaries ("Paper Excellence") 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. 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.
As previously announced on May 11, 2021, by Paper Excellence and Domtar (NYSE: UFS) (TSX: UFS), a leading provider of fiber based products, Paper Excellence and Domtar 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.
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.
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