Domtar announces commencement of tender offer for up to $250 million of its 7.875% notes due 2011


    (All figures in U.S. dollars)

    MONTREAL, May 20 /CNW Telbec/ - Domtar Corporation (NYSE/TSX: UFS) today
announced that it is commencing a cash tender offer for up to $250 million
aggregate principal amount (the "Tender Cap") of its outstanding 7.875% Notes
due 2011 (CUSIP No. 257559AA2) (the "Notes").
    The tender offer is scheduled to expire at 12:00 Midnight, New York City
time, on June 16, 2009 (the "Expiration Date"), unless extended or earlier
terminated. The total consideration for each $1,000 principal amount of the
Notes is $1,010 (the "Total Consideration"), which includes an early tender
payment of $10 per $1,000 principal amount of Notes (the "Early Tender
Payment") and the Purchase Price (as defined below). The Early Tender Payment
is payable only to holders of Notes who tender and validly deliver their Notes
on or prior to 5:00 p.m., New York City time, on June 1, 2009 (the "Early
Tender Time"), if such Notes are accepted for purchase by the Company. Holders
who tender their Notes after the Early Tender Time and on or prior to the
Expiration Date will be entitled to receive $1,000 per $1,000 principal amount
of the Notes (the "Purchase Price"), if such Notes are accepted for purchase
by the Company. Holders of Notes accepted for purchase by the Company will
also receive in addition to the Total Consideration or Purchase Price, as
applicable, accrued and unpaid interest on any Notes so purchased from the
last interest payment date to, but not including, the date on which the Notes
are purchased. The Company expects to accept the Notes for purchase promptly
after the Expiration Date and expects that it will pay the Total Consideration
or Purchase Price, as applicable, on the Notes on the business day following
the date that the Notes are accepted. As of May 19, 2009, approximately $540
million aggregate principal amount of the Notes were outstanding.
    The Company may increase or waive the Tender Cap at its sole discretion.
If the aggregate principal amount of Notes validly tendered pursuant to the
tender offer exceeds the Tender Cap, then, if the Company accepts Notes for
purchase, it will purchase such Notes on a pro rata basis among the tendering
Holders of Notes, based on the aggregate principal amount of Notes tendered by
each Holder. The Company's obligation to consummate the tender offer is
conditioned upon the satisfaction or waiver of certain conditions described in
the Offer to Purchase (as defined below), including the Company obtaining at
least $250 million in proceeds from an offering of debt securities, on terms
and conditions reasonably satisfactory to the Company, on or before the
Expiration Date.
    The complete terms and conditions of the tender offer are described in
the Offer to Purchase, dated May 19, 2009, of the Company (the "Offer to
Purchase"). The Company has engaged J.P. Morgan Securities Inc. and Morgan
Stanley & Co. Incorporated to act as dealer managers in connection with the
tender offer. Questions regarding the tender offer may be directed to J.P.
Morgan at (212) 270-1477 (collect) or (800) 245-8812 (U.S. toll-free) or to
Morgan Stanley at (212) 761-1941 (collect) or (800) 624-1808 (U.S. toll-free).
Requests for documentation may be directed to Global Bondholder Services
Corporation, the information agent and depositary for the tender offer, at
(212) 430-3774 (for banks and brokers) or (866) 470-3700 (U.S. toll-free).
    This press release is neither an offer to purchase nor a solicitation of
an offer to sell the Notes or any other security. The tender offer is being
made only by the Offer to Purchase, dated May 19, 2009, and the related letter
of transmittal. The offer is not being made to noteholders in any jurisdiction
in which the making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. In any jurisdiction
in which the offer is required to be made by a licensed broker or dealer, it
shall be deemed to be made by the dealer managers on behalf of the Company.


    About Domtar

    Domtar Corporation (NYSE/TSX:UFS) is the largest integrated manufacturer
and marketer of uncoated freesheet paper in North America and the second
largest in the world based on production capacity, and is also a manufacturer
of papergrade, fluff and specialty pulp. The Company designs, manufactures,
markets and distributes a wide range of business, commercial printing and
publication as well as converting and specialty papers including recognized
brands such as Cougar(R), Lynx(R) Opaque, Husky(R) Offset, First Choice(R) and
Domtar EarthChoice(R) Office Paper, part of a family of environmentally and
socially responsible papers. Domtar owns and operates Domtar Distribution
Group, an extensive network of strategically located paper distribution
facilities. Domtar also produces lumber and other specialty and industrial
wood products. The Company employs nearly 11,000 people. To learn more, visit

    Forward-Looking Statements

    All statements in this press release that are not based on historical
fact are "forward-looking statements." While management has based any
forward-looking statements contained herein on its current expectations, the
information on which such expectations were based may change. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to a number of risks, uncertainties, and other factors,
many of which are outside of our control that could cause actual results to
materially differ from such statements. Such risks, uncertainties, and other
factors include, but are not necessarily limited to, those set forth under the
captions "Forward-Looking Statements" and "Risk Factors" of the latest Form
10-K filed with the SEC as periodically updated by subsequently filed Form
10-Qs. Unless specifically required by law, we assume no obligation to update
or revise these forward-looking statements to reflect new events or

For further information:

For further information: Pascal Bossé, Vice-President, Corporate
Communications and Investor Relations, (514) 848-5938

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