January 31, 2006 14:38 ET

Roman Corporation To Restructure Under CCAA

TORONTO, ONTARIO--(CCNMatthews - Jan. 31, 2006) - Roman Corporation Limited (TSX:RMN) today announced that the company and its active subsidiaries have filed for protection under the Companies' Creditors Arrangement Act (CCAA) to facilitate a restructuring to allow the group to return to profitability as a leading Canadian supplier of recycled boxboard and manufacturer of printed folding cartons.

"These restructuring measures are required because of industry-wide problems affecting the North American paperboard and packaging industries which have negatively impacted our profitability", said Helen Roman-Barber, Chairman and Chief Executive Officer of Roman. "Working with our lenders, we intend to implement a plan of restructuring that will be the foundation of a reorganized and profitable business. Roman expects that the reorganization will involve a sale of the reorganized business", stated Mrs. Roman-Barber. It is not expected that there will be any value for the equity holders in this process.

Roman also announced that it has negotiated $8 million debtor-in-possession financing to provide working capital during the restructuring process so that the company will have stability to operate its business as usual during the restructuring process and permit the company to provide uninterrupted service to its customers.

The recycled paperboard packaging industry has been beset by serious difficulties over the past years, including the rise in the value of the Canadian dollar against the U.S. dollar leading to unprecedented price competition and margin compression. At the same time as currency fluctuations have depressed revenues and margins, a number of commodity price increases, most significantly in energy costs, have also served to depress margins.

Roman Corporation Limited is a leading manufacturer of paperboard packaging for the consumer packaged goods industry. The Company's products are the packaging choice for some of the most recognizable national and private label brand manufacturers in North America. Consumer goods packaged with the Company's products range from food and household goods such as frozen and dry food, beverages, powered laundry detergent, batteries and light bulbs to toys, pet products and hardware. The Company operates production facilities that manufacturer 100% recycled paperboard as well conversion of paperboard into printed folding cartons.

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