Fraser Papers Inc.

Fraser Papers Inc.

November 30, 2007 12:17 ET

Fraser Papers Announces $60 Million Equity Rights Offering to Shareholders and Signs a Standby Purchase Agreement with Brookfield Asset Management

TORONTO, ONTARIO--(Marketwire - Nov. 30, 2007) -


Fraser Papers Inc. ("Fraser Papers" or the "Company") (TSX:FPS) announced today that it has filed a preliminary short form prospectus with securities regulatory authorities in Canada relating to a rights offering (the "Offering"). Under the Offering, the Company will distribute rights ("Rights") which will entitle existing shareholders to purchase additional common shares.

In connection with the Offering, the Company has entered into a Standby Purchase Agreement with Brookfield Asset Management Inc. ("Brookfield") (TSX:BAM)(NYSE:BAM), its principal shareholder. In support of the Offering, Brookfield has agreed to exercise all of the Rights it receives and to purchase any common shares not otherwise subscribed for by other shareholders of the Company.

"The proceeds from this offering will enable us to reduce debt and provide us with the opportunity to focus on completing the business initiatives which are currently underway to address the challenging conditions facing our Company and our industry," stated Peter Gordon, Fraser Papers' President and CEO. "Brookfield's support for this transaction is significant and should be seen by our customers, suppliers and other stakeholders as a sign of their commitment to our business plans."

The Company expects to receive gross proceeds of up to $60 million. The net proceeds from the Offering will be used to repay drawings under the Company's credit facility including US$50 million related to a temporary increase in the facility which is scheduled for repayment on January 31, 2008.

Under the Offering, Fraser Papers' shareholders will receive one Right for each common share held as of the close of business on the record date. The number of common shares to be issued under the Offering, the final subscription price, the record date and the expiry date for the Offering will be determined at the time of filing a final short form prospectus. The effective price for each common share issued under the Offering will be the lesser of $3.00 and 87% of the volume weighted average trading price of the Company's common shares on the Toronto Stock Exchange ("TSX") for the five day period preceding and the five day period following the date of filing of the preliminary prospectus. The Company expects to file the final prospectus in mid-December. Shareholders that fully exercise their rights will be entitled to subscribe for additional common shares, if available, that were not subscribed for by other Rights holders. The Rights will be exercisable for at least 21 days following the date of mailing of the final prospectus. The Company has applied to the TSX to list the Rights on the TSX. Listing of the securities will be subject to satisfaction of certain conditions.

The Offering is subject to regulatory approval, including the approval of the TSX.

This news release does not constitute an offer to sell or the solicitation of an offer to buy these securities. In addition, these securities have not been registered under the United States Securities Act of 1933, or any state securities laws, and may not be offered or sold in the United States. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company, containing detailed information about the Company and management.

Fraser Papers is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec. Fraser Papers is listed on the Toronto Stock Exchange under the symbol: FPS. For more information, visit the Fraser Papers web site at

Note: This press release contains forward-looking information and forward-looking statements within the meaning of Canadian provincial securities laws. These forward-looking statements include, among others, statements with respect to a rights offering to shareholders. The words "will", "expect", "should", subject", "may" and other expressions which may be predictions of or indicate future events and trends, and which do not relate to historical matters, identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause the results of the rights offering to differ materially from that set forth in the forward-looking statements include general economic conditions, interest rates, foreign exchange rates, response of the Company's shareholders, issues in respect of the conditions of the Standby Purchase Agreement with Brookfield, regulatory approvals, supply, demand and pricing of the Company's products, changes in business strategy, and other risks detailed from time to time in the documents filed by the Company with the securities regulators in Canada. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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