Fortress Paper plans C$132.4 million loan via Investissement Quebec

By Sara Rosenberg

New York, Jan. 31 - Fortress Paper Ltd. has received a commitment for an up to C$132.4 million loan from Investissement Quebec, according to a news release.

The loan is comprised of two tranches - a C$102.4 million 10-year tranche and a C$30 million three-year tranche.

Pricing will be a fixed rate of 5% for the first five years, followed by a rate of up to 5.5% for the remaining five years, the release said.

Additionally, the loan will include equity compensation in the form of 715,000 share purchase warrants of Fortress Paper on terms to be determined.

Proceeds will be used to help fund the acquisition of a non-operating pulp mill located at Lebel-sur-Quevillon, Quebec, and the investment of about C$222 million in capital expenditures to convert the mill into a low-cost, high-quality dissolving pulp mill as well as to increase the capacity of the cogeneration facility.

Fortress Paper is a North Vancouver, B.C.-based dissolving pulp, specialty papers and security paper products company.

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