Tembec announces early tender and consent solicitation results

MONTREAL, Sept. 30, 2014 /CNW Telbec/ - Tembec Inc. ("Tembec") announced today that holders of US$301,072,000 principal amount of the 11.25% senior secured notes due 2018 (the "Notes") issued by its wholly-owned subsidiary, Tembec Industries Inc. (the "Company"), had tendered their Notes and delivered related consents on or before 5:00 p.m., New York City time, on September 29, 2014, which was the early tender deadline (the "Early Tender Deadline") for the Company's previously announced cash tender offer and consent solicitation for any and all of its outstanding Notes. The principal amount of Notes tendered represents approximately 98.71% of the outstanding principal amount of Notes.

The tender offer and consent solicitation are being made upon the terms and subject to the conditions set forth in the related Offer to Purchase and Consent Solicitation Statement dated September 16, 2014 (the "Statement"). In connection with the tender offer, the Company also solicited consents for certain proposed amendments to the indenture under which the Notes were issued (the "Indenture") that would, among other things, eliminate most of the restrictive covenants, certain events of default and certain related provisions contained in the Indenture as well as amend certain optional redemption provisions, including the minimum length for notice requirements (collectively, the "Base Amendments") and provide for the release of the liens on the collateral that secures the Company's, Tembec's and the other guarantors' obligations with respect to the Notes (the "Collateral Amendments" and together with the Base Amendments, the "Amendments"). Pursuant to the terms of the Indenture, the adoption of the Base Amendments and the Collateral Amendments required the consent of holders of at least a majority and 66 ⅔% of the outstanding principal amount of the Notes, respectively.

In conjunction with receiving the requisite consents, the Company, the guarantors party thereto, Wilmington Trust, National Association, as trustee (the "Trustee"), and Computershare Trust Company of Canada, as collateral agent, executed a second supplemental indenture (the "Supplemental Indenture") with respect to the Indenture governing the Notes effecting certain amendments that would implement the Amendments. The Supplemental Indenture is expected to become operative upon the acceptance for purchase by the Company of the Notes tendered, which is expected to occur on or about October 1, 2014, subject to the satisfaction or waiver of the conditions described in the Statement, including a financing condition.

Holders who validly tendered their Notes and delivered their consents on or prior to the Early Tender Deadline are eligible to receive US$1,078.28 per US$1,000.00 principal amount of Notes (the "Total Consideration"), plus accrued and unpaid interest up to, but not including, the first settlement date. The Total Consideration includes a consent payment of US$10.00 per US$1,000 principal amount of Notes (the "Early Tender Payment"). A holder's right to validly withdraw tendered Notes and validly revoke delivered consents expired on the Early Tender Deadline.

The tender offer and consent solicitation remain open and will expire at 11:59 p.m., New York City time, on October 14, 2014, unless extended or earlier terminated by the Company (the "Expiration Time"). Holders who validly tender their Notes after the Early Tender Deadline, but on or prior to the Expiration Time, and whose Notes are accepted for payment, will receive US$1,068.28 per US$1,000.00 principal amount of the Notes (the "Tender Offer Consideration"), plus accrued and unpaid interest on the Notes up to, but not including, the final settlement date. Holders of Notes who tender after the Early Tender Deadline will not receive an Early Tender Payment.

In accordance with the terms of the Indenture and the Supplemental Indenture, the Company expects to give notice to the Trustee of its intention to redeem the remaining outstanding Notes following the Expiration Time at the redemption price of 100% of the aggregate principal amount of the Notes to be redeemed, plus a make-whole premium, and accrued and unpaid interest up to, but not including, the redemption date. The redemption date is expected to be October 16, 2014.

This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell with respect to any securities. The tender offer and consent solicitation are only being made pursuant to the terms of the Statement and the related letter of transmittal. The tender offer and consent solicitation are not being made 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. None of the Company, Tembec, the dealer manager, the solicitation agent, the information agent, the depositary, the trustee or the collateral agent or their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the tender offer or deliver their consent to the Amendments.

The Company has engaged Deutsche Bank Securities Inc. to act as dealer manager and solicitation agent for the tender offer and consent solicitation and D.F. King & Co., Inc. to act as information agent and depositary for the tender offer. Requests for documents may be directed to D.F. King & Co., Inc. at [phone] (toll free) or [phone] (collect). Questions regarding the tender offer or consent solicitation may be directed to Deutsche Bank Securities Inc. at [phone] (toll free) or [phone] (collect).

About Tembec

Tembec is a manufacturer of forest products - lumber, pulp, paper and specialty cellulose - and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has approximately 3,500 employees and annual sales of approximately $1.6 billion. Tembec is listed on the Toronto Stock Exchange (TMB).

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of securities laws. Such statements may involve, but are not limited to, statements regarding the closing of the proposed offering of the New Notes, the use of proceeds of such offering and the Company's intention to purchase or redeem any Existing Notes and related matters. Forward-looking statements also include statements relating, without limitation, to Tembec's or its management's objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as "may", "will", "could", "anticipate", "estimate", "expect", "project", "intend" and "plan", the negative or variations thereof, and expressions of similar nature. These statements are based on certain assumptions and analyses made by Tembec in light of its experience and its perception of future developments. These forward-looking statements speak only as of the date stated or otherwise, as of the date of this press release, and, except as required by law, Tembec does not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, even if experience or future events make it clear that any expected results expressed or implied by these forward-looking statements will not be realized. Although Tembec believes that the expectations reflected in these forward-looking statements are reasonable, these expectations may not prove to be correct or Tembec may not achieve the financial results, savings or other benefits anticipated in the forward-looking statements. These forward-looking statements are necessarily estimates reflecting the best judgment of Tembec's management and involve a number of known and unknown risks and uncertainties, some of which may be beyond Tembec's control, which could cause its actual results, financial position, levels of activity, performance or achievements to differ materially from those suggested by the forward-looking statements, including, without limitation, those identified throughout Tembec's public disclosure file available on the website maintained by the U.S. Securities and Exchange Commission at http://www.sec.gov or on SEDAR at http://www.sedar.com. Risks, uncertainties and assumptions that could cause actual results to differ materially from the results indicated in the forward-looking statements include, among other things, the successful completion of the proposed offering of New Notes and the tender offer. In addition, the proposed offering of New Notes and the tender offer are subject to general market and other conditions and there are no assurances that the proposed offering of New Notes and the tender offer will be completed or that the terms of the tender offer and consent solicitation will not be modified.

SOURCE: Tembec

Michel Dumas
Executive Vice President, Finance and Chief Financial Officer
Tel: [phone]
[email protected]

Linda Coates
Vice President, Human Resources and Corporate Affairs
Tel.: [phone]
[email protected]