U.S. Securities and Exchange Commission Declares Form 10 Effective;
IRS Confirms Tax- free Status of Spin-off
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Jun. 16, 2014--
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
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
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
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.”
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.
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.
Source: Rayonier Inc.
Ed Kiker, 904-357-9186