Rayonier Advanced Materials Issues Statement Regarding Chatham Asset Management Letter; Board determines Chatham’s proposal is not in the best interest of the company and its shareholders


JACKSONVILLE, Fla-Rayonier Advanced Materials Inc. (NYSE: RYAM) (the “Company”) today issued the following statement in response to the March 17, 2022 letter of Chatham Asset Management, LLC (“Chatham”) sent to the independent members of the Company’s Board of Directors.

At March 15, 2022Chatham has provided a term sheet proposing that the Company refinance the Company’s 5.5% senior notes maturing in June 2024 (the “Leading Notes”). The Company responded on March 16, 2022, that he was reviewing the list of terms and would post a response. At March 17, 2022, Chatham publicly released a letter to independent board members expressing concern that management was not acting quickly enough. Chatham states in its letter that it also owns 72% (approximately $266 million) senior notes, 11% (approximately $52 million) of the Senior Secured Notes due January 2026and 6.3% of the common shares of the Company.

After careful consideration and in consultation with several advisors, the company’s board of directors has determined that Chatham’s proposal is not in the best interests of the company and its shareholders. The proposal contemplates, among other things, that the Company (i) immediately purchase $35 million Chatham Senior Notes, (ii) exchange approximately $300 million 5.5% senior bonds of the Company for new 5-year second bonds with an effective yield of 11.3% per annum, and (iii) repay the balance $35 million senior notes at par at or prior to their maturity. The result of the contemplated transactions would be for the Company to use a substantial portion of its cash, including a large payment at Chatham, and to exchange 5.5% Notes for Notes with a much higher coupon. With more than two years until the next major debt maturity and in light of its current liquidity position, the Company is confident in its ability to obtain refinancing on significantly more attractive terms than those offered by Chatham, and the Company is ready to take opportunistic action at the appropriate time to achieve this objective.

“The Board of Directors and management team regularly seek and welcome constructive feedback from the Company’s investors. To that end, the management team has engaged in several discussions with Chatham representatives and has promptly brought their perspectives and demands to the board,” said DeLyle W. Bloomquist, independent Chairman of the Board of Directors. “Although Chatham itself would benefit significantly from the implementation of its proposals, such transactions would be detrimental to the company and its other investors. Therefore, these transactions are not in the best interests of the Company and its shareholders.’

As noted during its February earnings call, the company expects a tough start to the year as it deals with extraordinary inflationary costs and supply chain constraints as well as significant maintenance disruptions to perform investments improving the reliability of its core assets; however, the Company remains committed to delivering improved EBITDA for the full year 2022. These planned business improvements are central to the Company’s refinancing strategy. The Company is firmly committed to adopting a disciplined and balanced approach to capital allocation in order to further improve its capital structure. It is focused on using its cash balances for investments in strategic reliability and value enhancement projects, such as the previously announced G2 bioethanol facility at France, which will be financed by low-cost green loans. The Company expects these investments to provide both immediate and lasting benefits to its business. The Company also has the ability to deploy cash balances to repay debt on an opportunistic basis; however, the Company believes that its current liquidity position is an asset that provides an additional option for a global refinancing of senior notes at a time when market conditions are more favourable. The Company will continue to closely monitor capital markets for opportunities to meet its 2024 maturities and further strengthen its capital structure. As always, the Company is committed to taking decisive action at the right time in the best interests of the Company and its shareholders.

On Rayonier Advanced Materials

Rayonier Advanced Materials is a world leader in cellulose-based technologies, including high-purity cellulosic specialties, a natural polymer commonly found in filters, foods, pharmaceuticals and other industrial applications. The Company also manufactures products for the paper and packaging markets. With manufacturing operations in the we, Canada and France, Rayonier Advanced Materials employs just over 2,500 people and generates around $1.4 billion of income. More information is available at www.rayonieram.com.

Forward-looking statements

Certain statements contained herein regarding anticipated financial, business, legal or other results, including business and market conditions, outlook and other similar statements relating to Rayonier’ advanced materials or future or expected events, developments or financial or operating 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 movables. These forward-looking statements are identified by the use of words such as “may”, “will”, “should”, “expect”, “estimate”, “believe”, “intend”, “anticipate and other similar terms. However, the absence of such words or similar expressions does not mean that a statement is not forward-looking. While we believe 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 such statements. Although we believe that the expectations reflected in the forward-looking statements are based on reasonable assumptions, we cannot guarantee that these expectations will be achieved and it is possible that actual results differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.

Other important factors that could cause actual results or events to differ materially from those expressed in any forward-looking statements that may have been made herein are or will be described in our filings with the US Securities and Exchange Commissionincluding our annual report on Form 10-K and our quarterly reports on Form 10-Q. Rayonier Advanced Materials assumes no obligation to update these statements, except as required by law.


Ryan Houck



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