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Last updated on April 23, 2014 at 20:10 EDT

Catalyst Paper to sell its interest in Powell River Energy

February 13, 2013

RICHMOND, BC, Feb. 13, 2013 /PRNewswire/ – Catalyst Paper (TSX:CYT) announced
today that it has agreed, subject to court approval, to sell its
approximately 50% interest in Powell River Energy Inc. and Powell River
Energy Limited Partnership to Powell River Energy Trust, a Brookfield
Renewable Energy affiliate for $33 million. Powell River Energy Trust
currently holds the other 50% stake in the Powell River Energy joint
venture originally established in 2001.

“Sale of this energy asset to our joint venture partner enables a smooth
operational transition, maintains reliable electricity supply for our
Powell River paper mill under a power purchase agreement and ensures we
meet the terms of the plan of arrangement in a timely way,” said
President and Chief Executive Officer Kevin J. Clarke. All electricity
generated by Powell River Energy will be sold to Catalyst under a power
purchase agreement which expires in 2016 with possible extension to
2021 at Catalyst’s discretion.

Pursuant to its plan of arrangement under the Companies’ Creditors Arrangement Act which became effective September 13, 2012, Catalyst is required to sell
its stake in Powell River Energy and to distribute to certain unsecured
creditors of Catalyst who did not elect to receive shares in Catalyst
in settlement of their claims, their pro rata share of 50% of the net
proceeds of the sale (which, given that many creditors elected to
instead receive shares, will result in a distribution of approximately
40% of the net proceeds of the sale).  The company will offer to
purchase a portion of its Floating Rate Senior Secured Notes with the
balance of the net proceeds. The sale is expected to complete in the
first quarter of 2013 and is subject to various closing conditions. The
company expects to apply to the British Columbia Supreme Court for
approval of the sale in the next 10 days.

Catalyst Paper manufactures diverse specialty mechanical printing
papers, newsprint and pulp. Its customers include retailers, publishers
and commercial printers in North America, Latin America, the Pacific
Rim and Europe. With three mills, located in British Columbia, Catalyst
has a combined annual production capacity of 1.5 million tonnes. The
company is headquartered in Richmond, British Columbia, Canada and is
ranked by Corporate Knights magazine as one of the 50 Best Corporate
Citizens in Canada.

Forward-Looking Statements

Certain matters set forth in this news release are forward-looking.
These forward-looking statements reflect management’s current views and
are based on certain assumptions including assumptions as to future
operating conditions and courses of action, economic conditions and
other factors management believes are appropriate. Such forward looking
statements are subject to risks and uncertainties that may cause actual
results to differ materially from those contained in these statement,
including the possibility that the required court approval for the sale
will not be obtained or the other conditions to the completion of the
sale will not be fulfilled, and those risks and uncertainties
identified under the heading “Risks and Uncertainties” in Catalyst’s
management’s discussion and analysis contained in Catalyst’s annual
report for the year ended December 31, 2011 and report for the third
quarter of 2012, which are available at www.sedar.com.

SOURCE Catalyst Paper Corporation


Source: PR Newswire