MONTREAL, Jan. 31 /CNW Telbec/ - Jolina Capital Inc. ("Jolina") presented
today the terms of its proposal ("Jolina Proposal") for the recapitalization
of Tembec Inc. ("Tembec") at a meeting of the holders of Tembec
Industries Inc. unsecured senior notes respectively due June 2009, February
2011 and March 2012.
The meeting was convened following Tembec's rejection of the Jolina
Proposal and Tembec's invitation to Jolina to make the details of its proposal
available to Tembec's stakeholders through a public announcement.
The key elements of the Jolina Proposal are as follows:
The Jolina Proposal would provide noteholders and preferred shareholders
(collectively, "Bondholders") a recovery equal to 55 cents on the dollar. The
Bondholders would receive cash, secured debt, and common shares, with
potential to make an election as to a mix of consideration (all cash versus
debt and equity) received.
The cash portion of the Jolina Proposal would be fixed at C$370.8 million
and would be provided by Jolina. Jolina's cash commitment of C$370.8 million
would take the form of C$150.0 million of secured debt and C$220.8 million of
common shares. Jolina would also provide for a C$250 million secured financing
which would be undrawn at closing and would be in addition to Tembec's
existing credit facility.
Under the Jolina Proposal, existing shareholders would receive 5% of the
shares of Tembec at the outset, and cashless warrants for 15% of the shares
upon a full recovery to Bondholders. At close, Jolina would receive 50% of the
equity, existing noteholders would receive 44.1%, existing preferred
shareholders would receive 0.9%, and existing equity holders would receive 5%.
On a fully diluted basis upon exercise of the warrants, Jolina would own 42.5%
of the equity, notheholders would own 37.4%, preferred shareholders would own
0.8%, and existing equity holders would own 19.3%.
Jolina is in advanced discussions with potential financial partners in
connection with the Jolina Proposal.
Jolina and its advisors continue to believe that the Jolina Proposal is
more favourable to Tembec and all of its stakeholders than the
recapitalization proposal announced by Tembec on December 19, 2007.
Any questions regarding the Jolina Proposal should be directed towards
Jolina's financial advisor, Rothschild Inc., attention: Neil Augustine,
Managing Director (212) 403-5411. Stakeholders interested in learning more
about the Jolina Proposal can find additional details on SEDAR as an
attachment to an amended Early Warning Report to be filed by Jolina pursuant
to applicable Canadian securities laws.
This press release contains forward-looking statements that are based on
expectations and estimates. Forward-looking statements may be identified by
the use of forward-looking terminology such as believe, intend, may, will,
expect, estimate, anticipate, continue or similar terms, variations of those
terms or the negative of those terms. Statements that are not historical
facts, including statements about beliefs and expectations of Jolina, are
forward-looking statements. These statements contain potential risks and
uncertainties, and actual results may therefore differ materially. Neither
Jolina nor its financial advisors undertake any obligation to provide the
recipient with access to any additional information, update the information
provided herein, correct any inaccuracies in, or omissions from, any
information provided herein which may become apparent or to publicly update
any forward-looking statements whether as a result of new information, future
events or otherwise.
Neither this announcement nor the meeting held today is to be taken as
any form of commitment on the part of Jolina to proceed with the Jolina
Neither this announcement nor the meeting held today constitute an offer
to purchase or a solicitation of an offer to purchase with respect to any
securities of Tembec or of any of its subsidiaries or a solicitation to
execute, withhold or revoke a proxy with respect thereto, whether in
connection with the securityholder meetings to be held by Tembec in connection
with its announced recapitalization proposal or otherwise.
For further information:
For further information: Neil Augustine, Rothschild Inc., (212)