Domtar Corporation and Karta Halten B.V., Through Its Subsidiary Pearl Merger Sub Inc., Announce the Pricing of Private Offering of Senior Secured Notes Due 2028

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FORT MILL, S.C. & RICHMOND, British Columbia — Domtar Corporation (“Domtar”), a leading supplier of a wide array of fiber-based items consisting of interaction, specialized and product packaging documents, market pulp and airlaid nonwovens, and Karta Halten B.V., a personal restricted business arranged under the laws of the Netherlands (“Karta Halten”) and affiliate of Paper Quality B.V., a personal restricted business arranged under the laws of the Netherlands (“Paper Excellence”), through its subsidiary, Pearl Merger Sub Inc., a Delaware corporation (“Merger Sub”), priced its formerly revealed using to qualified buyers of $775.0 million aggregate principal quantity of 6.750% senior protected notes due 2028 (the “Notes”). The Notes will grow on October 1, 2028, with interest payment dates on April 1 and October 1 of each year, starting on April 1, 2022. The Offering is exempt from the registration requirements of the Securities Act of 1933, as changed (the “Securities Act”). The Notes will be released at a cost of 100% of the aggregate principal quantity thereof. The issuance and sale of the Notes is arranged to pick or about October 18, 2021, based on popular closing conditions.


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The Offering belongs to the funding for, and is conditioned upon the consummation of, the suggested acquisition of Domtar and its subsidiaries by Karta Halten. Merger Sub has actually been formed for the sole function of finishing the acquisition and, at the closing of the acquisition, will be combined with and into Domtar (the “Merger”), with Domtar making it through the Merger and ending up being the provider of the Notes. As formerly revealed, Domtar, Karta Halten, Merger Sub, Paper Quality and Hervey Investments B.V., a personal restricted business arranged under the laws of the Netherlands, participated in a Contract and Strategy of Merger on May 10, 2021 (the “Merger Agreement”).

The net earnings from the Offering will be utilized, together with an equity financial investment, loanings under brand-new senior protected credit centers and, following the consummation of the Merger, money on Domtar’s balance sheet, to (i) pay the money factor to consider in connection with the Merger, (ii) bought Domtar’s 6.25% Senior Notes due 2042 and 6.75% Senior Notes due 2044 (the “Existing Domtar Notes”), if any, tendered for redemption in the modification of control deals for the Existing Domtar Notes to be performed by Domtar following the closing of the Merger), (iii) pay charges, expenses and costs in connection with the Merger and associated deals and (iv) fund money to the balance sheet.

If the Offering closes prior to the consummation of the Merger, the preliminary buyers will transfer the gross earnings from the sale of the Notes into an escrow account. On the occasion that (i) the Merger is not consummated by May 18, 2022 (the “Outside Date”), (ii) Merger Sub informs the escrow representative and the trustee for the Notes in composing that the Merger Arrangement has actually ended prior to the Outdoors Date or (iii) Merger Sub informs the escrow representative that in its affordable judgment, the Merger will not be consummated by the Outdoors Date, the Notes will undergo an unique necessary redemption, at a cost equivalent to 100% of the preliminary concern rate of the Notes plus accumulated and overdue interest from the concern date of the Notes to, however not consisting of, the date of such unique necessary redemption.

Upon the consummation of the Merger, the Notes will be totally and unconditionally ensured (jointly, the “Guarantees”), collectively and severally, on a senior protected basis by Pearl Quality Holdco L.P., a Delaware restricted collaboration, and each of Domtar’s existing and future domestic limited subsidiaries that is a guarantor under Domtar’s brand-new term loan credit contract.


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The Notes and associated Assurances will be provided just to certified institutional purchasers under Guideline 144A of the Securities Act, and to non-U.S. individuals in deals outside the United States under Policy S of the Securities Act. The Notes have actually not been, and will not be, signed up under the Securities Act and might not be provided or offered in the United States missing registration or a suitable exemption from, or in a deal exempt to, the registration requirements of the Securities Act and other appropriate securities laws.

This news release does not and will not make up a deal to offer, or the solicitation of a deal to purchase, the Notes or any other securities, nor will there be any sale of the Notes or other securities, in any state or other jurisdiction in which such deal, sale or solicitation would be illegal. Any deal will be made just by methods of a personal offering memorandum.

About Paper Quality

Paper Quality, a personal restricted business arranged under the laws of the Netherlands, is a varied maker of pulp and paper, consisting of printing and writing, product packaging, and specialized documents. Paper Quality thinks in the long-lasting worth of wood-based items in worldwide markets and has actually developed a big network of mills and breaking plants to produce them competitively. Through its unique method to functional quality, Paper Quality provides top quality and affordable items to global consumers. Paper Quality has actually grown through rational acquisitions from a single mill to a group producing 2.8 million tonnes of paper and pulp and utilizing more than 2,800 individuals over the previous years.

Extra info about Paper Quality is offered at

About Domtar

Domtar is a leading supplier of a wide array of fiber-based items consisting of interaction, specialized and product packaging documents, market pulp and airlaid nonwovens. With roughly 6,400 workers serving more than 50 nations all over the world, Domtar is driven by a dedication to turn sustainable wood fiber into helpful items that individuals depend on every day. Domtar’s yearly sales are roughly $3.7 billion, and its typical stock is traded on the New york city and Toronto Stock Exchanges. Domtar’s primary executive workplace remains in Fort Mill, South Carolina. To read more, see


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Positive Declarations

All declarations made herein that are not historic truths must be thought about as positive declarations within the significance of the Personal Securities Lawsuits Reform Act of 1995. Such declarations include understood and unidentified dangers, unpredictabilities and other aspects that might trigger real outcomes to vary materially. These declarations consist of, however are not restricted to, declarations concerning the anticipated conclusion and timing of the proposed deal in between Paper Quality and Domtar, anticipated advantages and expenses of the proposed deal, and management strategies connecting to the proposed deal, declarations that attend to each business’s anticipated future organization and monetary efficiency, declarations concerning the effect of natural catastrophes, health upsurges and other break outs, particularly the break out of COVID-19 considering that December 2019, which might have a product unfavorable result on each business’s organization, outcomes of operations and monetary conditions, and other declarations recognized by words such as “anticipate”, “believe”, “expect”, “intend”, “aim”, “target”, “plan”, “continue”, “estimate”, “project”, “may”, “will”, “should” and comparable expressions. These positive declarations must be thought about with the understanding that such declarations include a range of dangers and unpredictabilities, understood and unidentified, and might be impacted by incorrect presumptions. As a result, no positive declaration can be ensured and real outcomes might differ materially. Many risks, contingencies and uncertainties could cause actual results to differ materially from our positive statements. Certain of these risks are set forth in Domtar’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as well as the company’s other reports filed with the SEC.

Those risks, uncertainties and assumptions also include the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction between Paper Excellence and Domtar that could reduce anticipated benefits or cause the parties to abandon the proposed transaction, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the proposed transaction, the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Domtar’s common stock, the risk of any unexpected costs or expenses resulting from the proposed transaction, the risk of any litigation relating to the proposed transaction, the risk that the proposed transaction and its announcement could have an adverse effect on the ability of Paper Excellence or Domtar to retain customers and retain and hire key personnel and maintain relationships with their suppliers, customers and other business relationships and on their operating results and businesses generally, the risk that the pending proposed transaction could distract management of both entities and they will incur substantial costs, the risk that the combined company may not operate as effectively and efficiently as expected and other important factors that could cause real outcomes to differ materially from those projected. All such factors are difficult to predict and are beyond each company’s control.

Additional factors that could cause results to differ materially from those described above can be found in Domtar’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as well as in the company’s other reports filed with the SEC.

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Nicholas Estrela
Investor Relations
Tel.: 514-848-5049

David Struhs
Corporate Services and Sustainability
Tel.: 803-802-8031




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Jobber Wiki author Frank Long contributed to this report.