Société générale de financement du Québec (SGF) enters into an agreement to sell 8 million shares of Domtar
Montréal, May 9, 2002 - Société générale de financement du Québec (SGF) and Domtar Inc. have entered into an agreement with a syndicate led by National Bank Financial Inc. and Scotia Capital Inc., which also includes CIBC WorldMarkets Inc., Merrill Lynch Canada Inc. and UBS Bunting Warburg Inc., for the sale by the SGF of 8 million shares of Domtar Inc. at a price of $17.50 per share. The block of 8 million shares was acquired by the SGF in the fall of 2001 at a price of $11.44 per share, when Domtar proceeded with a stock offering in the wake of its acquisition of four pulp and paper mills in the United States. The net gain for SGF is expected to reach approximately $48 million.
SGF will hold 36.3 million Domtar shares, or 16% of the outstanding common shares, after this transaction. It will thus remain a significant shareholder in the Company through a subsidiary of SGF Rexfor. “In addition to recording an attractive return of 48% over a 8‑month period on our investment of last fall, this transaction enhances our ability to fund other projects, while allowing us to keep a significant equity participation in Domtar,” said Claude Blanchet, President and Chief Executive Officer of SGF.
A preliminary short form prospectus qualifying the offering for distribution to the public will be filed in all jurisdictions across Canada by May 13, 2002. Subject to the necessary regulatory approvals, closing is expected to be on or about May 29, 2002.
SGF’s mission consists in carrying out economic development projects in cooperation with various partners and under normal profitability conditions. Since its restructuring in 1998, SGF has generated close to $7.5 billion in investments and created more than 43,000 direct and indirect jobs. As of December 31, 2001, SGF’s consolidated assets exceeded $3 billion. SGF includes 57 international partners operating various establishments in Quebec. (sgfqc.com)