Features
Tembec confirms rejection of recapitalization proposal from Jolina

Montreal, QC — In response to a press release issued by Jolina Capital, Tembec confirmed it had received an unsolicited non-binding proposal from Jolina on a confidential basis concerning a potential alternative recapitalization transaction. At the request of Jolina, Jolina and its advisors made a presentation to Tembecs Board of Directors and its legal and financial advisors describing the principal terms of the Jolina Proposal.

After due consideration of the Jolina Proposal and after consultation with its legal and financial advisors, the Board of Tembec unanimously concluded that the Jolina Proposal could not reasonably be expected to result in a transaction more favourable to Tembec and its stakeholders (including the noteholders of Tembec Industries) than the proposed recapitalization transaction announced by Tembec on December 19, 2007. After making this determination, Tembec invited Jolina and its advisors on a number of occasions to meet with representatives of Tembec and the legal and financial advisors of noteholders who support the Recapitalization and whose support would be required for the Jolina Proposal to proceed. Jolina and its advisors declined to participate in such a meeting. Tembec invites Jolina to make the details of its proposal available to Tembecs stakeholders through a public announcement.

Noteholders holding, in aggregate, approximately US $774 million of the outstanding notes (representing approximately 65% of the outstanding notes) have executed support agreements and have agreed to vote in favour of and support the Recapitalization. Tembec will continue to solicit further support for the Recapitalization.

Tembec anticipates that the proxy circular for the Recapitalization (the Proxy Circular) will be mailed early next week and will be filed concurrently on SEDAR.