KP Tissue Closes Financing Transactions for $575 million TAD2 Project in Quebec

KP Tissue Inc. (KPT)  has reported that Kruger Products L.P. (KPLP) and certain of its subsidiaries have closed financing transactions to fund the previously announced TAD2 Project of $575 million in the Brompton area of Sherbrooke, QC, to build a new, state-of-the-art tissue plant featuring Canada’s largest and most modern TAD paper machine along with related converting equipment and infrastructure. Furthermore, the existing debt related to the Memphis TAD1 Project was also refinanced with more favorable terms and conditions.

"We are very pleased to announce that the financing associated with the TAD2 Project is now completed. The financing structure will be non-dilutive to KPT shareholders but will require higher leverage ratios during the construction and start-up period of the project. The financing in place provides us with the flexibility to execute the project and with terms and conditions supporting solid long-term returns for our shareholders. As indicated before, this significant investment in capital expenditures is central to our long-term North American growth strategy in the ultra-premium paper tissue segment," said Dino Bianco, CEO of KP Tissue and KPLP.

KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 15.8 percent interest in KPLP.

KPLP is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. KPLP serves the Canadian consumer market with such well-known brands as Cashmere, Purex, SpongeTowels, Scotties and White Swan. In the US, KPLP manufactures the White Cloud brand, as well as many 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. KPLP has approximately 2,500 employees and operates eight FSC COC-certified (FSC C-104904) production facilities in North America.