Repap Will Not Amalgamate New Brunswick Operations

The board of directors of Repap Enterprises Inc. has decided that, in the best interest of its shareholders, it has decided not to proceed with the previously announced intention to amalgamate with Repap New Brunswick Inc. The company explained that this decision was reached based upon the deteriorating market condition for Repap's coated paper products and the continuing uncertain outlook for 1999.

Repap Enterprises Inc. is a major producer of coated groundwood paper with 9% of North American capacity. The company's high quality paper is used in magazines, catalogs, inserts, and commercial printing applications.

Repap's world-class coated paper complex in New Brunswick has two modern paper machines with a design capacity of 492,000 m.t./yr, a northern bleached softwood kraft pulp mill with an annual capacity of 235,000 m.t., an integrated groundwood pulp mill with an annual capacity of 123,000 m.t., and lumber operations with an annual capacity of 58 million foot board measure.