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Kejriwal Group International (KGI), represented by Rahul Kejriwal, entered into a letter of intent with four major private equity shareholders of Canada’s Catalyst Paper Corp. (TSX: CYT) who control 79% of its shares, to acquire the Richmond, British Columbia-based paper manufacturer, in a going-private transaction. Catalyst shares skyrocketed today on the Toronto Stock Exchange by 747.46% from Friday’s close of CAD$0.59 a share to CAD$5.00, giving the company a market value of CAD$72.64 million. Catalyst’s major stakeholders are hedge funds and private equity firms Mudrick Capital Management LP, Cyrus Capital Partners LP, Oaktree Capital Management LP, and Stonehill Capital Management LLC, which have filed 13D forms with the US SEC in connection with the proposed transaction, indicating that in addition to the 79% equity shareholdings, they also hold 85% of Catalyst’s outstanding senior secured notes. Under the proposed buyout, KGI will exchange the 79% equity stake held by the four major shareholders, for interests in a new junior convertible term loan. The approximately 21% remaining Catalyst shares not owned by the major shareholders, will be purchased by KGI at a price of CAD$6.00 per share. The deal also provides for Catalyst’s existing credit facilities to have their maturities extended, or be refinanced, and existing PIK toggle senior secured notes due October 2017 would be exchanged for interests in a new 5-year US$260.5 million term loan. Trade and other obligations would remain unaffected. According to a term sheet filed with the SEC, KGI is to provide at closing a commitment to fund an aggregate CAD$60 million equity investment, of which CAD$20 million is to be invested in Catalyst at closing, CAD$5 million within six months following the closing, and at least CAD$35 million within one year after the closing. “The board of directors has indicated that it is encouraged by KGI’s proposal which could provide the company with a significant amount of capital which further enhances and accelerates Catalyst’s planned growth initiatives,” the company said in a statement. Kejriwal Group, also operating as Kejriwal Stationery Holdings Ltd, and formerly known as Greenearth Education Ltd, is engaged in the paper pulp and recycling industry, and provides paper as raw material for newspapers, stationery items, and book publishing. The company is based in Mumbai, India. Rahul Kejriwal serves as the company’s managing director. Catalyst Paper, formerly Norske Skog Canada Ltd, manufactures diverse printing papers such as coated freesheet, C1S, coated and uncoated groundwood, newsprint, directory, as well as market pulp. Customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. Catalyst was founded in 1946. With five mills across North America, Catalyst has an annual production capacity of 2.3 million tonnes. The company offers its products under the Orion, Vision, Escanaba, Dependoweb, Capri, Consoweb, Electraprime, Electracal, Electrastar, Electrabrite, Catalyst, and Marathon brands.]]>