U.S. Securities and Exchange Commission
Declares Form 10 Effective; IRS Confirms Tax- free Status of
Spin-off
Rayonier Inc. (NYSE:RYN) today announced significant progress
toward completing the planned separation of its Performance Fibers
business from its Forest Resources and Real Estate businesses. The
separation will occur by means of a tax-free spin-off of 100% of
the common stock of Rayonier Advanced Materials Inc., which will
contain the Performance Fibers business. The common stock of
Rayonier Advanced Materials is expected to trade on the New York
Stock Exchange (NYSE) under the symbol “RYAM.”
Rayonier announced that the U.S. Securities and Exchange
Commission has declared effective the Registration Statement on
Form 10 filed by Rayonier Advanced Materials in connection with the
spin-off. Additionally, the company announced that it also received
a private letter ruling from the U.S. Internal Revenue Service
(IRS) confirming the tax-free status of the planned spin-off,
including certain related internal reorganization transactions.
“With these latest developments, we are now firmly on track to
separate effective June 27,” said Paul Boynton, Chairman, President
and CEO. “This has been a complex endeavor, requiring significant
effort throughout the company. Thanks to the tremendous effort of
our employees, as well as our advisors, we will soon be two
independent, industry-leading companies that will continue to
deliver value to our shareholders.”
IRS Private Letter
Ruling
Based on certain facts, assumptions, representations and
undertakings set forth in the IRS ruling, for U.S. federal income
tax purposes, the distribution of Rayonier Advanced Materials
common stock generally will not be taxable to Rayonier or to U.S.
holders of Rayonier common stock, except in respect to cash
received in lieu of fractional shares, which generally will be
taxable to the holders as capital gain. The spin-off is subject to
the continued validity of the private letter ruling from the
IRS.
Initial Trading Details
On May 27, 2014, Rayonier’s board of directors approved the
separation and declared a special distribution of one share of
Rayonier Advanced Materials common stock for every three common
shares of Rayonier held by Rayonier shareholders as of the close of
business on June 18, 2014. With these latest approvals, the
distribution is expected to be effective at 11:59 p.m., Eastern
Time, on June 27, 2014.
There is no current market for Rayonier Advanced Materials
common stock. The NYSE has authorized the listing of Rayonier
Advanced Materials common stock under the symbol “RYAM” following
the distribution. Rayonier Advanced Materials has been advised that
trading in its common stock is expected to begin on a “when issued”
basis on June 16, 2014, under the symbol “RYAM WI.” “When issued”
trading of Rayonier Advanced Materials common stock will continue
until Rayonier makes the distribution of Rayonier Advanced
Materials common stock on June 27, 2014. “When issued” trades of
Rayonier Advanced Materials common stock will settle after June 27,
2014, when Rayonier Advanced Materials becomes a standalone
company.
Beginning on June 16, 2014, and continuing through June 27,
2014, Rayonier expects that Rayonier common shares will trade in
two markets on the NYSE: the “regular-way” market under the symbol
“RYN” and the “ex-distribution” market under the symbol “RYN WI.”
Rayonier common shares trading under “RYN” will carry the right to
receive shares of Rayonier Advanced Materials through the
distribution. Rayonier shares trading under “RYN WI” will not carry
the right to receive shares of Rayonier Advanced Materials through
the distribution.
Rayonier shareholders who sell their shares in the “regular-way”
market on or before June 27, 2014, will also be selling their
entitlement to receive the distribution of Rayonier Advanced
Materials common stock. Rayonier shareholders are encouraged to
consult with their financial advisors regarding the specific
consequences of selling Rayonier common shares on or before June
27, 2014.
On June 30, 2014, “regular-way” trading will commence on the
NYSE for Rayonier Advanced Materials common stock under the symbol
“RYAM” and will continue for Rayonier common shares under the
symbol “RYN.”
Post-Separation
After the separation, Rayonier will own and operate the
company’s existing Forest Resources and Real Estate businesses.
Rayonier will be a geographically diverse forest resources company
with 2.6 million acres of high-quality timberlands, including
approximately 200,000 acres well situated for real estate
development along coastal Florida and Georgia. The company will
maintain its status as a tax-efficient real estate investment
trust. The company intends to maintain its strong balance sheet and
pay a competitive dividend to its shareholders and expects to
retain an investment-grade credit profile.
Rayonier Advanced Materials will be the world’s leading producer
of high-value specialty cellulose fibers, with proprietary
cellulose chemistry expertise and manufacturing process knowledge
developed over 85 years. The company’s production facilities in
Florida and Georgia manufacture a wide range of customized high
purity products, using both hardwood and softwood. The company is
expected to continue to generate strong cash flows and to pay a
dividend competitive with its peer group. Rayonier Advanced
Materials has secured a BB+/Ba2 grade credit rating.
Certain statements in this document regarding anticipated
financial, legal or other outcomes including business and market
conditions, outlook and other similar statements relating to
Rayonier's and Rayonier Advanced Materials’ future events,
developments or financial or operational performance or results,
are "forward-looking statements" made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking statements
are identified by the use of words such as "may," "will," "should,"
"expect," "estimate," "believe," "intend,” "anticipate" and other
similar language. However, the absence of these or similar words or
expressions does not mean that a statement is not forward-looking.
While management believes that these forward-looking statements are
reasonable when made, forward-looking statements are not guarantees
of future performance or events and undue reliance should not be
placed on these statements.
Although Rayonier and Rayonier Advanced Materials believe that
the expectations reflected in any forward-looking statements are
based on reasonable assumptions, they can give no assurance that
these expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties. Such risks and uncertainties include, but are not
limited to: uncertainties as to the timing of the spin-off and
whether it will be completed, the possibility that various closing
conditions for the spin-off may not be satisfied or waived, the
impact of the spin-off on the businesses of Rayonier and Rayonier
Advanced Materials, the ability of both companies to meet debt
service requirements, the availability and terms of financing and
expectations of credit rating. Other important factors are
described in Rayonier’s most recent Form 10-K and 10-Q reports on
file with the Securities and Exchange Commission and in Rayonier
Advanced Materials’ Registration Statement on Form 10 that could
cause actual results or events to differ materially from those
expressed in forward-looking statements that may have been made in
this document. Neither Rayonier nor Rayonier Advanced Materials
assumes no obligation to update these statements except as required
by law.
About Rayonier
Rayonier is a leading international forest products company with
three core businesses: Forest Resources, Real Estate and
Performance Fibers. The company owns, leases or manages 2.6 million
acres of timber and land in the United States and New Zealand. The
company's holdings include approximately 200,000 acres with
residential and commercial development potential along the
Interstate 95 corridor between Savannah, Ga., and Daytona Beach,
Fla. Its Performance Fibers business is one of the world's leading
producers of high-value specialty cellulose fibers, which are used
in products such as filters, pharmaceuticals and LCD screens.
Approximately 50 percent of the company's sales are outside the
U.S. to customers in approximately 20 countries. Rayonier is
structured as a real estate investment trust. More information is
available at www.rayonier.com.
Rayonier Inc.InvestorsEd Kiker, 904-357-9186orMediaRussell
Schweiss, 904-357-9158
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