Catalyst Paper Corporation announced that it has entered into an Asset Purchase Agreement with NewPage Corporation, NewPage Wisconsin System Inc. and Rumford Paper Company (the "Sellers") to purchase the Biron paper mill located in Wisconsin and the Rumford pulp and paper mill located in Maine, USA (the "Paper Mills") for consideration of U.S. $74 million, subject to certain adjustments (the "Transaction").

Catalyst intends to finance the acquisition through a combination of advances under its revolving asset-based credit facility (the "ABL Credit Facility"), the maximum amount of which is to be increased in connection with the transaction. To provide additional working capital following the consummation of the Transaction, Catalyst also intends to effect a US$25.0 million offering of additional PIK Toggle Senior Secured Notes ("Additional PIK Toggle Notes"), which would form part of the same series as Catalyst's outstanding PIK Toggle Senior Secured Notes (the "PIK Toggle Notes").

To assist in financing the acquisition and provide additional working capital, Catalyst has received a Letter of Commitment from Canadian Imperial Bank of Commerce and Wells Fargo Capital Finance Corporation Canada to increase the Company's ABL Credit Facility by $50.0 million, from $175.0 million to $225.0 million, the maximum amount of credit available under the ABL Credit Facility. Catalyst has received the requisite consent from holders of PIK Toggle Notes to give effect to the increase in the ABL Credit Facility.  The availability of the proposed increase in the ABL Credit Facility is subject to the satisfaction of certain customary conditions, including the entering into by the relevant parties of required amendments to the credit agreement governing the ABL Credit Facility.

To provide additional working capital following the completion of the Transaction, Catalyst also intends to issue US$25.0 million of Additional PIK Toggle Notes.  The Additional PIK Toggle Notes will be offered by Catalyst to eligible holders of PIK Toggle Notes, with eligible offerees being permitted to subscribe for their pro-rata share of Additional PIK Toggle Notes based on the aggregate principal amount of PIK Toggle Notes held by such holders relative to the total aggregate principal amount of outstanding PIK Toggle Notes. The Additional PIK Toggle Notes will be issued at a 20% discount to face value.  When issued, the Additional PIK Toggle Notes are expected to form part of the same series of notes as the PIK Toggle Notes. Catalyst and certain holders of its PIK Toggle Notes have executed a definitive term sheet to backstop the issuance of Additional PIK Toggle Notes. The offering of Additional PIK Toggle Notes is expected to close concurrently with the consummation of the Acquisition or shortly thereafter. As the terms of the offering of Additional PIK Toggle Notes have not been finalized, there is no certainty that such a financing will be completed or completed on the terms described above.  Completion of any such offering will be subject to receipt of any required third party, regulatory and exchange approvals.

Catalyst 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 in British Columbia, Catalyst has annual production capacity of 1.5 million tonnes.