Temiscaming, Quebec, Canada, 11 August 2010 – Tembec Inc. announced today the pricing of an offering of USD 255 million in aggregate principal amount of 11.25% senior secured notes due 2018 at an issue price of 98.717%.
The aggregate principal amount of the notes offered was increased from USD 250 million. The notes are being offered by Tembec’s wholly-owned subsidiary, Tembec Industries Inc. in a private offering to “qualified institutional buyers” as defined in Rule 144A under the U.S. Securities Act of 1933, as amended, and outside the United States in reliance on Regulation S under the Securities Act.
The notes will be senior secured obligations of the company, secured by a first priority lien on certain of the property and assets of the company and the guarantors of the notes, other than receivables, inventory, and certain intangibles upon which the note holders will have a second priority lien. The notes will be guaranteed by Tembec and certain of the company’s subsidiaries. The proceeds from the offering, together with cash on hand, will be used to permanently repay all outstanding indebtedness under Tembec’s and the company’s existing USD 300 million term loan facility, to pay prepayment premiums in connection therewith and to pay fees and expenses related to the offering.
On issuance, the notes will not be registered under the Securities Act or the securities laws of any other jurisdiction. In connection with the offering, the company will agree that following completion of the offering, it will file an exchange offer registration statement with the U.S. Securities and Exchange Commission with respect to an offer to exchange the notes and, under certain circumstances, a shelf registration statement with respect to resale of the notes. Until registered, the notes may be offered only in transactions that are exempt from registration under the Securities Act or the securities laws of any other jurisdiction and will therefore be subject to substantial restrictions on transfer.
Tembec is a large, diversified and integrated forest products company and a global leader in sustainable forest management practices. The company’s principal operations are located in Canada and France. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available at www.tembec.com.