Georgia-Pacific noteholders organize to negotiate over planned acquisition

New York, Nov. 22 - A group of investors owning more than $2 billion of Georgia-Pacific Corp.'s notes and debentures announced it has formed an ad hoc committee to negotiate with the company over the planned acquisition by Koch Industries, Inc. subsidiary Koch Forest Products, Inc.

Altogether the committee holds "substantially more" than 25% of most of Georgia-Pacific's 16 separate issues of public debt, sufficient to give a notice of default. The company has a total of around $6 billion of bonds outstanding.

"The ad hoc committee is interested in pursuing a constructive dialogue for the benefit of all concerned, but the committee is greatly concerned about the effect the proposed acquisition and related transactions would have on noteholders," said the committee's counsel, Andrew Rahl of Anderson Kill & Olick, in a news release.

"In addition to improved financial and other terms, the committee also is seeking greatly enhanced information regarding Georgia-Pacific's financial position following the acquisition."

On Nov. 17, Georgia-Pacific launched tender offers for $2.4 billion of debt securities it and its Fort James Corp. subsidiary have issued - but other debt issues will remain outstanding after the acquisition by Koch.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

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