Fraser Papers Inc.
TSX : FPS

Fraser Papers Inc.

April 24, 2007 17:11 ET

Fraser Papers Withdraws Proposal to Acquire Katahdin-Announces Tender Offer for 8.75% Senior Notes

TORONTO, ONTARIO--(CCNMatthews - April 24, 2007) -

(All financial references are in US dollars unless otherwise noted)

Fraser Papers Inc. (TSX:FPS) announced today that, after discussions with its shareholders, it is withdrawing the proposal to acquire the Katahdin Paper Company from Brookfield Asset Management Inc. (TSX:BAM)(NYSE:BAM). As a result, the Company intends to make an offer to all holders of its 8.75% senior notes to purchase the remaining $84.0 million of notes outstanding, including $15.5 million that the Company currently holds, at a price of 100% of the principal amount plus accrued interest to the settlement date, pursuant to the terms under the existing trust indenture.

"We are disappointed that we were unable to adequately communicate the attributes that this transaction would bring to Fraser and its shareholders. As a result, we will proceed with the redemption of our outstanding senior notes and continue to execute our focused strategy pursuing value-added products in niche market segments," commented Peter Gordon, President.

Written notices will be mailed on or before May 31, 2007 to each holder of the notes. Fraser Papers intends to tender all of the $15.5 million of the notes that it holds. The settlement date for the repurchase will be no earlier than 30 days after notices are mailed.

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 www.fraserpapers.com.

Note: This press release contains forward looking information within the meaning of Canadian provincial securities laws and other "forward-looking statements" within the meaning of Section 27A of the U.S. Securities Act of 1933 as amended and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, including statements about the Company's intentions to purchase its Senior Notes. These statements are based on certain assumptions and reflect the Company's current expectations. These assumptions include the continuation of recent trends with respect to a number of economic factors and assumptions implicitly or explicitly mentioned or referred to in this release. The words "will", "intend", and other expressions (including all variations of such words) which are predictions of or could 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 to differ materially from those set forth in the forward-looking statements include receptivity of Note Holders to the tender offer, general economic conditions, interest rates, availability of equity and debt financing 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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