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Fortress Paper Ltd
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Vancouver, British Columbia, Canada, 08 June 2010 -- Fortress Paper Ltd. (TSX:FTP) has entered into a financing agreement with a syndicate of underwriters led by Dundee Securities Corporation and including Jennings Capital Inc., Raymond James Ltd., and TD Securities Inc. Pursuant to the agreement, the underwriters have agreed to purchase, on a bought deal basis, 1,739,000 common shares of the company priced at CAD 23.50 per share (the offering price), for total gross proceeds of CAD 40,866,500 (the offering).

The company has agreed to grant the underwriters an over-allotment option to purchase up to an additional 260,850 common shares of the company at the offering price, exercisable in whole or in part, at any time on or before the date that is 30 days following the closing of the offering. If the over-allotment option is exercised in full, the aggregate gross proceeds of the offering will be CAD 46,996,475.

Fortress Paper intends to use the net proceeds of the offering to finance certain capital expenditures relating to its Fortress specialty cellulose mill in Thurso, Quebec and its rebuild of paper machine No. 1 at its Landqart mill, and for working capital and general corporate purposes.

The offering is expected to close on or about 09 July 2010, and is subject to certain customary conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities. The offering will be made in Canada by way of a short form prospectus and may be made in jurisdictions outside of Canada on a private placement basis pursuant to prospectus and registration exemptions in accordance with applicable laws. The company intends to file a preliminary short form prospectus relating to the offering with the applicable securities regulatory authorities in Canada in due course.

The securities being offered have not been, nor will they be, registered under the U.S. Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements.  

 

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