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Catalyst Acquires Snowflake Newsprint Mill From AbitibiBowater
Richmond, British Columbia, Canada, 10 April 2008 -- /PRNewswire/ -- Catalyst Paper Corporation (TSX:CTL) has completed its USD 161 million acquisition of the recycled newsprint mill in Snowflake, Arizona. A definitive agreement to acquire this operation from an AbitibiBowater subsidiary was announced in February, and its finalization represents the first extension of Catalyst's manufacturing base beyond Canada.

This sale was approved by the U.S. Department of Justice to comply with the requirements set for approval of the Abitibi-Consolidated/Bowater combination. AbitibiBowater plans to use the proceeds from this sale for general corporate purposes.

The Snowflake mill, located about 290 km (180 miles) from Phoenix, Arizona, is one of the lowest-cost newsprint mills in North America. Its annual production capacity is 375,000 tons of 100% recycled newsprint. This brings Catalyst's total newsprint production capacity to approximately 980,000 tons, complementing its mechanical specialty paper capacity of some 1.1 million tons.

"Increasing our recycled newsprint capacity strengthens our ability to meet demand for this grade in large urban regions," said Richard Garneau, president and chief executive officer. "The Snowflake mill is well-located to serve growing population centres in western North American and is the freight-logical supplier to a number of key markets."

The acquisition is expected to provide annual synergies of USD 10 million through cost-savings in purchasing and related services, as well as optimization of product distribution networks. It also provides Catalyst with fiber and currency diversification.

Snowflake has a record of performance and profitability, reflecting positive labor relations and modern equipment. It is an energy self-sufficient mill with the potential to sell some excess electricity to the power grid. Snowflake's production will be marketed under Catalyst's Marathon newsprint brand.

The acquisition was financed, in part, through a CAD 125 million rights offering resulting in the issue of approximately 167.1 million subscription receipts. With the completion of the Snowflake acquisition, each of the subscription receipts was deemed exercised for one fully paid common share of Catalyst. Share certificates representing the common shares will be distributed to holders of the subscription receipts shortly. The balance of the purchase price for the acquisition was funded by drawings under Catalyst's secured revolving operating facility.

About Catalyst Paper

Catalyst is a leading producer of mechanical printing papers, headquartered in Richmond, British Columbia, Canada. The company also produces market kraft pulp and owns Western Canada's largest paper recycling facility. With six mills strategically located within western North America, Catalyst has a combined annual capacity of 2.8 million tons of product. Catalyst's common shares trade on the Toronto Stock Exchange under the symbol CTL.

About AbitibiBowater

AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. Following the required divestiture agreed to with the U.S. Department of Justice, AbitibiBowater will own or operate 27 pulp and paper facilities and 35 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, AbitibiBowater is also among the world's largest recyclers of newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.


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