Sale of Domtar’s Forest Products in jeopardy
October 16, 2007 By Pulp & Paper Canada
Montreal, QC — Domtar has received a notice purporting to terminate the agreement, announced on June 22, 2007, rel…
Montreal, QC — Domtar has received a notice purporting to terminate the agreement, announced on June 22, 2007, relating to the sale of Domtar’s forest products business to Conifex Inc.
The action follows a written notice received by Domtar on October 1, 2007, from the Minister of Natural Resources and Wildlife for the province of Quebec purporting to revoke, effective September 14, 2007, Domtar’s forest license rights relating to the Grand-Remous and Malartic sawmills. Domtar has stated that it believes the Minister’s action is unjust, and noted it intends to file formal proceedings before the Quebec Superior Court to enforce its rights.
Domtar also believes that the purported unilateral termination of the agreement is invalid pursuant to the terms of the agreement. Although the consent of the Minister to the transfer of the forest license rights is a condition of the closing of the transaction, the buyer would only have the right to terminate as of December 31, 2007, in the event that Domtar was unsuccessful in challenging the revocation of these licenses by that date.
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