KP Tissue Announces Senior Unsecured Notes Financing and Intention to Redeem 6.00% Notes Due April 2025

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Not for distribution on the NewsWIRE Services in the United States or for publication in the United States

MISSISSAUGA, Ontario, Oct. 25, 2024 (GLOBE NEWSWIRE) — KP Tissue Inc. has announced… (KPT) (TSX: KPT) today announced that Kruger Products Inc. (“KPI”) has agreed, pursuant to the subscription agreement entered into today. To issue and sell C$135 million principal amount of 6.625% senior unsecured notes (the “Notes”) due November 1, 2031 by private placement (the “Offering”). Interest on the Notes will be paid semi-annually in arrears on May 1 and November 1 of each year, beginning May 1, 2025.

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Scotia Capital Inc. and National Bank Financial Inc. and CIBC Capital Markets Inc. and TD Securities Inc. As joint managers to manage the offering books. The offering is expected to close on November 1, 2024, subject to customary closing conditions. KPI intends to use the net proceeds from the offering to redeem all of KPI’s 6.00% senior unsecured notes due April 24, 2025 (the “2025 Notes”) and for general corporate purposes. KPI intends to deliver today a notice of redemption of the 2025 Notes with a redemption date of November 12, 2024 provided the offering closes prior to that date.

The Notes will be unsecured obligations of KPI and are unconditionally guaranteed, jointly and severally, by certain of KPI’s subsidiaries, being the same guarantors under KPI’s syndicated credit facilities. The Notes will be senior in right of payment to all current and future subordinated indebtedness of the KPI and equal in right of payment to all KPI indebtedness that is not subordinate to the right of payment to the Notes other than any indebtedness that is senior to the Notes by operation of law.

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The offer and sale of bonds has not been and will not be registered under United States Securities Act of 1933as amended (“Securities Act”), or applicable state securities laws, and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Notes have not been and will not be eligible for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of the Notes in Canada will be made on a basis exempt from the prospectus requirements of such securities laws.

This press release does not constitute an offer to sell or buy the Notes, or a solicitation of an offer to sell or buy the Notes. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful. This press release does not constitute a notice of redemption of the 2025 Notes.

About KP Tissue Inc.
KPT has been established to acquire, and is limited to holding, a limited equity interest in KPI, which is accounted for as an equity investment. KPT currently holds a 12.56% stake in KPI. For more information visit www.kptissueinc.com.

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About Kroger Products, Inc.
KPI is Canada’s leading manufacturer of high-quality tissue products for home, industrial and commercial use. KPI serves the Canadian consumer market with popular brands such as Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and Bonterra®. In the United States, KPI manufactures the White Cloud® brand, as well as several private label products. The Away-From-Home division manufactures and distributes high quality, cost-effective product solutions to a wide range of commercial and public entities. KPI has approximately 2,800 employees and operates ten FSC® COC (FSC® C-104904) certified production facilities in North America. For more information visit http://www.krugerproducts.ca.

Forward-looking information
Certain information contained herein is forward-looking information, within the meaning of applicable Canadian securities laws. This information is typically identified by words such as “expect”, “believe”, “could”, “estimate”, “anticipate”, “plan”, “intend”, “anticipate”, “future”, “guidance”, ” “may”, “forecast”, “project”, “should”, “strategy”, “goal”, “will” or similar expressions indicating future results. The forward-looking information contained in this press release includes the expected closing date of the offering, the use of the net proceeds of the offering, the delivery of the 2025 Notes redemption notice and the expected redemption date. KPT believes that the expectations reflected in such forward-looking information are reasonable, but no assurance can be given that such expectations will prove to be correct, and undue reliance should not be placed on such information.

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Forward-looking information is not a guarantee of future performance. By its nature, forward-looking information involves inherent assumptions, risks and uncertainties, both general and specific, and the risks that predictions, forecasts, projections and other forward-looking information will not be achieved. These risks include, but are not limited to, risks associated with the ability to satisfy the closing conditions of the offering. If one or more of these risks and uncertainties materialize, or if the assumptions described above prove incorrect, KPT’s actual performance and results in future periods may differ materially from any expectations of future performance or results expressed or implied by such forward-looking information. We caution readers not to place undue reliance on such information because a number of important factors could cause actual results to differ materially from the beliefs, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking information.

The forward-looking information contained in this news release is provided for the purpose of providing information about management’s objectives, plans and scope of expectations for the future and may not be appropriate for other purposes. Any forward-looking information is given as of the date hereof, and except as required by law, KPT undertakes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

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