Fraser Papers Seeks Court Approval to Sell New Hampshire Paper Mill

Toronto, Ontario, Canada, 30 June 2010 – Fraser Papers Inc. announced today that it will seek court approval of the transaction to sell its paper mill in Gorham, New Hampshire, USA. Approval will be sought from the Ontario Superior Court of Justice (Commercial List) at a hearing scheduled for 07 July 2010, and from the U.S. Bankruptcy Court for the District of Delaware at a hearing scheduled for 14 July 2010. Fraser Papers and the purchaser have agreed to extend the closing date to 31 August 2010, as they continue to make positive progress toward finalizing terms of the transaction.

The paper mill in Gorham currently operates three paper machines and produced 80,000 tons of uncoated freesheet papers and 37,000 tons of towel products in 2009.

In conjunction with the proposed sale of the of the Gorham mill, Fraser Papers announced that it has provided notice to the employees of the Gorham mill under the Worker Adjustment and Retraining Notification (WARN) Act. In the event that the company cannot complete the transaction before 31 August 2010, the company is reserving its rights with respect to continuing operations at the Gorham mill.

Fraser Papers remains under creditor protection pursuant to the provisions of the Companies’ Creditors Arrangement Act (CCAA), with its stay of proceedings having been extended by the court to 09 July 2010. At the hearing scheduled for 07 July 2010, the company expects to, among other things, request an extension of the stay of proceedings.