Fortress Paper Agrees to Sell
Vancouver, British Columbia, Canada 13 March 2013 -- Fortress Paper Ltd. ("Fortress Paper" or the "Company") (TSX:FTP) is pleased to announce that it and its wholly owned subsidiary, Fortress Security Papers AG ("FSP"), have entered into a share purchase agreement (the "Share Purchase Agreement") with Glatfelter Gernsbach GmbH & Co. KG ("Glatfelter Gernsbach") and its parent, P.H. Glatfelter Co. ("Glatfelter"), pursuant to which FSP has agreed to sell all of the shares of its wholly owned subsidiary, Dresden Papier GmbH ("Dresden"), to Glatfelter Gernsbach for an aggregate purchase price of €160,000,000 (CDN$213 million), subject to working capital adjustment. The transaction is expected to close within the second quarter of 2013, but no later than June 30, 2013, and is subject to certain customary conditions, including governmental anti-trust approvals in Germany and the Ukraine.
Pursuant to the terms of the Share Purchase Agreement, the Company has agreed to guarantee the obligations of FSP and Glatfelter has agreed to guarantee the obligations of Glatfelter Gernsbach thereunder.
Dresden owns and operates the Company's Dresden Mill, a producer of non-woven wallpaper base paper operating in Germany.
Chadwick Wasilenkoff, President and Chief Executive Officer of Fortress Paper, commented "The sale of the Dresden Mill is an important step in Fortress Paper becoming a more focused global leader in the dissolving pulp industry. The transaction was part of our strategic plan to achieve significant liquidity to enhance future growth opportunities. We are very pleased to have been able to reach an agreement with P.H. Glatfelter and look forward to the finalization of the sale. We would also like to acknowledge the contributions of the Dresden management team over the years and wish them every success in the future."
About Fortress Paper
Fortress Paper operates internationally in three distinct business segments: dissolving pulp, specialty papers and security paper products. The Company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill located in Canada, which is also in the process of expanding into the renewable energy generation sector with the construction of a cogeneration facility. The Company is also seeking to expand its dissolving pulp capacity with the recent acquisition of Fortress Global Cellulose Mill located at Lebel-sur-Quévillon, Québec, which the Company intends to convert into a dissolving pulp mill and where the Company intends to re-start the cogeneration facility.
The Company operates its specialty papers business at the Dresden Mill located in Germany, where it is a leading international producer of specialty non-woven wallpaper base products. As of the closing date of the Share Purchase Agreement, the Company will no longer operate in this industry.
The Company operates its security paper products business at the Landqart Mill located in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers, and at its Fortress Optical Facility located in Canada, where it manufactures optically variable thin film material.