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Fraser Papers Commences Offer to Purchase Outstanding Senior Notes
Toronto, Ontario, Canada, 01 June 2007 --(CCNMatthews)-- Fraser Papers Inc. (TSX:FPS) announced today that it has commenced an offer to purchase all of the CAD 84 million outstanding of its 8.75% Senior Notes due 15 March 2015. The purchase price will be 100% of the principal amount of the Notes plus accrued and unpaid interest up to the date of purchase pursuant to the offer.

Under the terms of the Indenture governing the Notes, Fraser Papers is required to make an offer to purchase substantially all of the Notes with the excess proceeds resulting from the sale of the company's New Brunswick timberlands to Acadian Timber Income Fund (TSX:ACD) in January of 2006.

The expiration time for the offer will be 5:00 p.m. Eastern Time on 26 July 2007. To participate in the offer, holders must tender the Notes before the expiration time.

Fraser Papers intends to tender the CAD 15.5 million principal amount of the Notes that it owns into the offer.

Any holder desiring to tender Notes should refer to the Offer to Purchase being circulated to holders to ensure valid tender procedures.

Questions regarding the offer should be addressed to either the Depositary or Fraser Papers.

Financing required to complete the offer will come from a number of sources, including availability under the company's existing credit facility and the monetization of up to all of its interest in Acadian. In this regard, Fraser Papers has filed notice with the appropriate regulatory authorities of the company's intention to distribute its interest in Acadian under National Instrument 45-102 Resale of Securities ("NI 45-102"). Such sales, if any, will be effected by way of control block distributions under NI 45-102, subject to required approvals of the Toronto Stock Exchange. Fraser Papers holds securities that are indirectly exchangeable for 3,613,780 units of Acadian, representing a 22% interest in Acadian on a fully-diluted basis. The company cautioned that there can be no assurances that Fraser Papers will sell any of its interest in Acadian.

Fraser Papers is an integrated specialty paper company which produces a broad range of specialty packaging and printing papers. The company has operations in New Brunswick and Quebec in Canada, and in Maine and New Hampshire in the United States. Fraser Papers is listed on the Toronto Stock Exchange under the symbol: FPS. For more information, visit the Fraser Papers Web site at www.fraserpapers.com.

Note: The securities offered have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

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