Tembec recapitalization set to close Feb. 29

By Lisa Kerner

Charlotte, N.C., Feb. 22 - The required majority of Tembec Inc. shareholders and Tembec Industries Inc. noteholders approved the company's recapitalization at special meetings on Friday.

More than 95.34% of shareholders and more than 98.25% of noteholders who voted in person or by proxy voted in favor of the transaction, according to a company news release.

The recapitalization will reduce Tembec's net debt by $1.2 billion and enhance the company's long-term value, Tembec said in a prior news release.

Approval is still needed from the Ontario Superior Court of Justice, which will hold hearing on the matter on Feb. 27.

The recapitalization transaction is expected to close on Feb. 29.

Tembec also announced it had reached an agreement with owners of all the company's preferred shares, Investissement Quebec and the Societe generale de financement du Quebec, related to the transaction.

As previously reported, Jan. 21 was the record date for qualifying noteholders to participate in the new $250 million to $300 million loan under the recapitalization, as well as to receive their share of 43% of the recapitalized Tembec equity, which will be based on their participation in the loan.

Under the recapitalization, the noteholders will also receive their share of 45% of the recapitalized equity of Tembec, based on the principal amount of notes held on the implementation date of the recapitalization, plus payment of any interest accrued up to Dec. 31.

Based in Montreal, Tembec is an integrated forest products company with operations primarily in North America and France.

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