Company Press Release: Repap Concludes Enron Transactions
Friday May 15, 5:23 pm Eastern Time
STAMFORD, Connecticut, May 15 /CNW-PRN/ - Repap Enterprises Inc. [OTC BB:RPAPF - news] today announced it had completed its previously announced issuance and sale of US$45 million of 6% new Convertible Subordinated Debentures to Enron Capital & Trade Resources Corp. (''ECT''), a subsidiary of Enron Corp [NYSE:ENE - news]. These 6%
Convertible Subordinated Debentures will mature in June 2005 and will be convertible into Repap common stock at US$0.35 per share (approximately Cdn $0.50 per share).
Repap also announced it has issued a redemption notice to redeem, on June 15, 1998, all of its outstanding Cdn $75 million, 9% Convertible Subordinated Debentures maturing June 30, 1998.
In connection with ECT's investment, Repap and ECT have entered into a five-year Energy Advisory Services Agreement to improve Repap's energy flexibility and reduce Repap's energy-related costs and risk exposures. In addition, Repap and ECT have entered into a Pulp Sales Agency Agreement to support Repap's pulp sales and a Pulp and Paper Price Risk Management Program to manage Repap's exposure to product price volatility.
Repap Enterprises Inc. is a major producer of lightweight coated groundwood paper with 9% of North American capacity. This high quality paper is utilized in magazines, catalogs, inserts and commercial printing applications. The Company's world-class coated paper complex in New Brunswick has two modern paper machines with an annual design capacity of 492,000 tons, a northern bleached softwood kraft pulp mill with an annual capacity of 235,000 metric tons, an integrated groundwood pulp mill with an annual capacity of 123,000 metric, tons and lumber operations with an annual capacity of 58
mmbf.
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