Fraser Papers Inc.

Fraser Papers Inc.

July 14, 2010 14:12 ET

Fraser Papers Announces Financial Results for the First Quarter of 2010

TORONTO, ONTARIO--(Marketwire - July 14, 2010) -

(All financial references are in U.S. dollars unless otherwise noted)

Fraser Papers Inc. ("Fraser Papers" or the "Company") today reported financial results for the first quarter ended April 10, 2010.

As a result of the sale of the Company's specialty papers assets to Twin Rivers Paper Company Inc. ("Twin Rivers") and the sale of the Company's pulp mill in Thurso, Québec in April 2010, the Company has classified its specialty papers business and Thurso pulp mill as "held for sale" as at December 31, 2009 and April 10, 2010. The operating results of these operations have been disclosed as "discontinued operations" in the Statements of Operations.

The Company generated an EBITDA loss of $0.8 million from continuing operations in the first quarter of 2010 compared to positive EBITDA of $2.4 million in first quarter of 2009. Net loss for the first quarter amounted to $13.1 million or $0.26 per share compared to a loss of $16.7 million or $0.33 per share in the first quarter of 2009. During the first quarter of 2010, the Company recorded an impairment charge related to its paper mill in Gorham, New Hampshire of $7.5 million or $0.15 per share.

Fraser Papers has filed its first quarter 2010 financial statements, including the related management discussion and analysis, on SEDAR at www.sedar.com. As a result, the Company is now in compliance with its continuous disclosure obligations.

On June 18, 2009, citing continued operating losses, weak markets for its products, impending debt repayments and significant pension funding obligations, the Company and its subsidiaries filed for creditor protection under the Companies' Creditors Arrangement Act ("CCAA") in Canada and Chapter 15 of the U.S. Bankruptcy Code.

In December 2009, Fraser Papers submitted a restructuring proposal to the courts that has provided for an early exit from creditor protection for its core specialty papers business and should provide for the maximum recovery of value for creditors. The proposal involved a two-stage process that created a stand-alone business out of the Company's specialty papers assets to be followed by the subsequent divestiture of the remaining assets by way of separate transactions.

The proceeds from the sale of the specialty papers assets to Twin Rivers, plus additional proceeds from the sale of the remaining assets in Fraser Papers, will be used to settle the remaining secured claims against the Company, prior to distributing any remaining proceeds to its unsecured creditors. The remaining assets include a paper mill in Gorham, New Hampshire and two lumbermills in northern Maine. The Company completed the sale to Twin Rivers on April 28, and the sale of the pulp mill in Thurso, Québec on April 30, 2010.

The ultimate recovery for the creditors of Fraser Papers, if any, will not be determined until a final determination of all the claims against the Company and a distribution of the net proceeds.

For more information, please visit www.fraserpapers.com.

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 the potential recovery of value for creditors and the use of proceeds from the sale of the Company's assets. The words "should", "will", variations of those words, similar words, 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 actual the recovery of value for creditors and the use of proceeds from the sale of the Company's assets to differ materially from those set forth in the forward-looking statements include general economic conditions, unforeseen administrative, legal, or transactional issues, and other risks detailed from time to time in the documents filed by the Company with the securities regulators in Canada. In addition, the Company and its subsidiaries are currently operating under creditor protection laws in Canada and the United States. Many of the Company's plans are subject to the review of commercial courts in Canada and the United States. The Company cannot anticipate when such plans will be the subject of consideration by the commercial courts or, if they are, what impact that consideration will have on the plans or intentions of the Company. 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.

Contact Information