Neenah Paper Signs Agreement To Transfer Terrace Bay Pulp Mill

Alpharetta, GA - Neenah Paper, Inc. recently announced it had signed sales agreements with Terrace Bay Pulp Inc. and Eagle Logging Inc., members of the Buchanan group, to transfer the company's Terrace Bay pulp mill and the company's woodlands assets. A tentative agreement between the parties was announced in early May.

Pursuant to terms of the final agreement, Terrace Bay Pulp Inc. will assume responsibility for the Terrace Bay operations, including existing employee and other contracts, and certain assets and liabilities related to the operation. The assets of the company's woodland operations will be transferred to Eagle Logging Inc. Neenah Paper will make a cash payment of approximately $18M and retain certain working capital amounts, primarily accounts receivable, finished inventories and accounts payable, as well as employee liabilities for pension, long-term disability and post-employment medical and life insurance for retirees.

In accordance with the agreement, Neenah Paper will initiate plans to curtail and settle its Ontario, Canada defined benefit pension plan. Estimated cash costs related to this settlement are $18M, with an initial payment of $11M anticipated in the third quarter. It is anticipated that the transaction will close in August.

SOURCE Neenah Paper, Inc.