Neenah Paper to Complete Transformation to Premium and Specialty Paper Company with Agreement to Sell Pictou Pulp Mill

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[{"type":"text","content":"\n\n\n\nALPHARETTA, Ga., May 15 /CNW/ -- Neenah Paper, Inc. (NYSE: NP) announced\ntoday that it had signed a definitive agreement to sell its Pictou pulp mill\nto Northern Pulp Nova Scotia Corporation ("Northern Pulp"), a new operating\ncompany of Atlas Holdings LLC ("Atlas") and Blue Wolf Capital Management LLC\n("Blue Wolf"). The mill, located in Nova Scotia, Canada consists of one\nmachine with annual capacity of approximately 270,000 metric tons of pulp. In\n2007, approximately 90 percent of the mill's production was northern bleached\nsoftwood kraft pulp. The sale agreement pertains only to the Pictou mill and\nassociated woodlands operations; Neenah Paper will retain the 500,000 acres of\ntimberlands that it owns in Nova Scotia.\n\n\nNeenah expects to pay approximately $15 to $20 million to Northern Pulp\nto assist the new company in its transition to stand-alone status. Payments\nwill be made in two installments, the first at the time of closing and the\nsecond in the third quarter. Final amounts will be subject to adjustments\nbased on levels of working capital, capital spending and costs incurred during\nthe recent mill annual maintenance down. As part of the terms of the sale,\nNorthern Pulp will assume all assets and liabilities associated with the\nPictou operations, as well as existing customer contracts, supply agreements,\nlabor agreements and pension obligations. In addition, Northern Pulp and\nNeenah Paper have agreed upon a market-based fiber supply agreement to ensure\nongoing fiber supply to the mill.\n\n\n"This sale is the last major step of our strategy over the past three\nyears to transform ourselves from a commodity pulp and paper company to a\nperformance-based specialty products and premium fine paper company. Without\npulp, Neenah Paper will be less capital intensive and less volatile and we can\nfocus on our core businesses and the sale of our remaining timberlands," said\nSean Erwin, Chief Executive Officer and Chairman of the Board. "We are pleased\nwith the sale to Atlas and Blue Wolf, as they are experienced owners and\noperators of pulp and paper mills who are committed to long-term success in\nthese industries. While we will make an initial payment under the agreement,\noverall we expect to be over $20 million cash positive as a result of tax\nbenefi...

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