SOURCE: Port Townsend Paper Corporation

April 19, 2007 20:18 ET

Port Townsend Paper Corporation Receives Final Court Approval of $50 Million Debtor in Possession Financing

PORT TOWNSEND, WA -- (MARKET WIRE) -- April 19, 2007 -- Port Townsend Paper Corporation and its affiliates (the "Company") today announced that it has received final approval from the U.S. Bankruptcy Court for the Western District of Washington (the "Court") for DIP financing up to an aggregate amount of $50 million. As previously announced on March 30, 2007, pursuant to an Interim Order, the Court had previously approved the DIP financing consisting of an aggregate amount of $38 million in notes issued to certain holders of the Company's existing senior secured notes. The proceeds from the $38 million in DIP financing were used on March 30, 2007 to repay the Company's prior DIP facility with CIT Corporation and provide additional working capital. The final approval permits up to an additional $12 million in notes to be issued to certain of the Company's existing senior secured notes holders who had previously committed to provide such financing subject to final court approval. These additional proceeds will provide the Company with increased working capital to meet its liquidity needs in Chapter 11.

The Company also announced that the hearing date for the Company's Disclosure Statement has been rescheduled with the Court for 9:30 a.m. on May 15, 2007. Additional information and schedules relating to the Company's Disclosure Statement, which was originally filed on February 28, will be filed with the court on or about May 9, 2007. "Substantial reporting requirements associated with bankruptcy and our DIP loan have delayed completion of the schedules necessary for the Disclosure Statement," said John Begley, the Company's Chief Executive Officer. "However, the significant liquidity provided by the new DIP facility is good news for our vendors and suppliers, and we remain committed to moving through the bankruptcy process as quickly as possible," continued Begley. The Company also said it received final court approval of the appointment of the firm Alvarez and Marsal as its Chief Restructuring Officer.

Copies of court documents filed in connection with the Chapter 11 cases are available via the Court's website at www.wawb.uscourts.gov. Please note that a PACER password is required to access the documents via the Court's website.

The Port Townsend Paper family of companies employs approximately 800 people and annually produces more than 320,000 tons of unbleached Kraft pulp, paper and linerboard at its mill in Port Townsend, Washington. The Company also manufactures approximately 1.8 billion square feet of corrugated products annually at its three Crown Packaging Plants and two BoxMaster Plants located in British Columbia and Alberta. For more information on Port Townsend Paper Corporation, please see the Company's websites at www.ptpc.com and www.crownpackaging.com.

Some of the statements in this press release are forward-looking statements. Forward-looking statements include statements about our future financial condition, our industry and our business strategy. Statements that contain words such as "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope" or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of Port Townsend Paper Corporation, its parent, PT Holdings Company, Inc. and all of its subsidiaries. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results Port Townsend Paper Corporation, PT Holdings Company, Inc. and its subsidiaries, could differ materially. Among the factors that could cause plans, actions and results to differ materially from current expectations include the following: the impact of general economic conditions; containerboard and corrugated products general industry conditions, including competition, product demand and product pricing; fluctuation in wood fiber and recycled fiber costs; fluctuations in purchased energy costs; and legislative or regulatory requirements, particularly concerning environmental matters.

Contact Information

  • Contact:
    Timothy P. Leybold
    Port Townsend Paper Corporation
    (360) 385-3170