Fraser Papers Inc.

Fraser Papers Inc.

September 28, 2010 14:31 ET

Fraser Papers Terminates Agreement to Sell New Hampshire Paper Mill

TORONTO, ONTARIO--(Marketwire - Sept. 28, 2010) - Fraser Papers Inc. (together with its subsidiaries, "Fraser Papers" or the "Company") announced today that it has terminated the agreement to sell its paper mill in Gorham, New Hampshire. The Company announced that the purchaser could not secure sufficient financing to complete the transaction.

The Company has begun contacting other parties to determine their interest in acquiring the mill.

Fraser Papers also announced that it will close the mill indefinitely while the Company continues its efforts to sell the mill. The Company plans to shut down the Gorham mill indefinitely on or about October 13, 2010, depending upon whether acceptable orders can be obtained. The Company noted that the shutdown is due to current market conditions and is in no way reflective of the outstanding dedication and commitment of the employees at the mill who have worked tirelessly to ensure Fraser Papers' paper products are of the highest quality.

In conjunction with the anticipated shutdown of the of the Gorham mill, Fraser Papers has provided notice to the employees of the Gorham mill under the Worker Adjustment and Retraining Notification ("WARN") Act.

Fraser Papers remains under creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act ("CCAA") in Canada and Chapter 15 of the United States Bankruptcy Code in the United States.

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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 indefinite closure of the Company's New Hampshire paper mill and efforts to sell the mill. The words "will", "continue", "plans", "anticipate", variations of those words and other words and 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 actual results of the closure and potential sale of the New Hampshire paper mill to differ materially from those set forth in the forward-looking statements include, unforeseen administrative or legal issues, the inability to attract potential purchasers, 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.

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