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Fraser Papers proceeds with sale of specialty papers business


February 2, 2010
By Pulp & Paper Canada

Having received no additional offers to purchase its specialty papers business, Fraser Papers Inc. has termina…

Having received no additional offers to purchase its specialty papers business, Fraser Papers Inc. has terminated the bid process and will toward completing the firm purchase offer sponsored by the company’s secured creditors that was signed on December 22, 2009.
The bid process was approved by the Ontario Superior Court and by the U.S. Bankruptcy Court. According to Fraser Papers, a number of parties expressed preliminary interest, but none of them submitted letters of intent.
Under the terms of the purchase agreement, the unsecured creditors of Fraser Papers will receive ten-year promissory notes and a 49% common equity interest in the new company. Brookfield Asset Management Inc., a secured creditor, has agreed to convert its secured claim against the company into a 51% common equity interest in the new company, while the Government of New Brunswick has agreed to convert its US$35 million secured loan plus accrued interest into equity in the form of preferred shares of the new company. The new company and Fraser Papers are currently negotiating a US$50 million revolving credit facility with CIT Business Credit Canada Inc., which will provide the new company with operating liquidity.
Fraser Papers is an integrated specialty paper company that produces a broad range of specialty packaging and printing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec.

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