Tuesday, May 7, 2013

"Port Townsend Paper Corporation Reaches Agreement in Principle With Holders of More Than 70% of Senior Secured Notes to Restructure Debt Through Chapter 11 Proceeding"


" PORT TOWNSEND, Wash., Jan. 29 /PRNewswire/ -- PT Holdings Company, Inc.  (the "Company"), the parent company of Port Townsend Paper Corporation  ("PTPC"), announced today that the Company and its U.S. affiliates have  filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the  U.S. Bankruptcy Court for the Western District of Washington (the  "Bankruptcy Court"). The Company's Canadian subsidiaries are not part of
 the filing.

     Through the Chapter 11 cases, the Company will seek to implement an  agreement in principle it has reached with members of an ad hoc committee  holding more than 70% in principal amount of the Company's 11% Senior  Secured Notes due 2011 (the "Senior Secured Notes") on the terms of a  consensual chapter 11 plan of reorganization. The agreement in principle is  reflected in a term sheet filed with the Bankruptcy Court in connection  with the Chapter 11 cases (the "Term Sheet").

The Term Sheet provides that  holders of the Senior Secured Notes would receive, on a pro rata basis, in  exchange for their allowed secured claims against the Company (inclusive of
 principal and interest accrued through the petition date of the Chapter 11  cases): (i) newly issued notes in a principal amount not to exceed $75  million and (ii) 100% of the newly issued shares of common stock of  reorganized PTPC, subject to dilution on account of the Management Equity Plan (as defined in the Term Sheet) and warrants provided to existing
 holders of common equity to purchase 5.25% of the new common stock with a  strike price equivalent to a $170 million total enterprise value.

     Upon emergence from Chapter 11, in accordance with the Term Sheet, the
 Company anticipates that it will have less than $100 million of funded
 indebtedness, representing a reduction of at least $50 million from 2006
 year end. Additional terms and conditions of the reorganization will be
 outlined in a disclosure statement which will be sent to holders entitled
 to vote on the plan of reorganization after it is approved by the
 Bankruptcy Court.

     Port Townsend Paper Corporation President and Chief Executive Officer
 John Begley stated, "The balance sheet restructuring will significantly
 enhance our financial strength and operational flexibility, which will
 benefit all of our stakeholders. We expect to improve our short- and
 long-term liquidity, allowing us to better serve our customers, to meet our
 debt service and working capital requirements and to fund capital
 expenditures for new programs."

     Copies of court documents filed in connection with the Chapter 11 cases
 are available via the Bankruptcy Court's website at www.wawb.uscourts.gov.
 Please note that a PACER password is required to access the documents via
 the court's website.

     The Port Townsend Paper family of companies employs approximately 800  people and annually produces more than 320,000 tons of unbleached Kraft  pulp, paper and linerboard at its mill in Port Townsend, Washington. The  Company also operates three Crown Packaging Plants, two BoxMaster Plants,  and the Crown Creative Group, located in British Columbia and Alberta.

     Some of the statements in this press release are forward-looking  statements. Forward-looking statements include statements about our future  financial condition, our industry and our business strategy. Statements  that contain words such as " will," "should," "anticipate," "believe,"  "expect," "intend," "estimate," "hope" or similar expressions, are  forward-looking statements.

These forward-looking statements are based on  the current expectations of Port Townsend Paper Corporation, its parent, PT   Holdings Company, Inc. and all of its subsidiaries. Because forward-looking  statements involve inherent risks and uncertainties, the plans, actions and
 actual results Port Townsend Paper Corporation, PT Holdings Company, Inc.  and its subsidiaries, could differ materially.

Among the factors that could  cause plans, actions and results to differ materially from current
 expectations include the following: uncertainty related to the approval of  the plan of reorganization by our creditors and the bankruptcy court, the  impact of general economic conditions; container board and corrugated  products general industry conditions, including competition, product demand  and product pricing; fluctuation in wood fiber and recycled fiber costs;  fluctuations in purchased energy costs; and legislative or regulatory requirements, particularly concerning environmental matters."

Source
http://www.prnewswire.com/news-releases-test/port-townsend-paper-corporation-reaches-agreement-in-principle-with-holders-of-more-than-70-of-senior-secured-notes-to-restructure-debt-through-chapter-11-proceeding-53808447.html

More information at
http://www.porttownsendpapermill.com/

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