KP Tissue Inc. Completes $140 Million Initial Public Offering

MISSISSAUGA, ONTARIO--(Marketwire - Dec. 13, 2012) -

NOT FOR DISTRIBUTION IN THE U.S.A. OR OVER U.S. WIRE SERVICES

KP Tissue Inc. (TSX:KPT) (the "Corporation") announced today the closing of its initial public offering of 8,000,000 common shares of the Corporation at a price of $17.50 per share resulting in gross proceeds of $140 million. The common shares are listed on the Toronto Stock Exchange under the symbol "KPT". The proceeds will be used to subscribe for 8,000,000 units of Kruger Products L.P. which will provide KP Tissue Inc. with a 15.7% interest in Kruger Products L.P.

The underwriters have also been granted an over-allotment option, exercisable within 30 days from the date hereof, to purchase up to an additional 1,200,000 common shares from the Corporation. If the over-allotment option is exercised, the Corporation will use the proceeds from the sale of these additional shares to subscribe for additional units of Kruger Products L.P. which will result in KP Tissue Inc. having up to a 17.6% interest in Kruger Products L.P.

The remaining 84.3% interest in Kruger Products L.P. (or 82.4% if the over-allotment option is exercised in full) is held by Kruger Products 2010 L.P. ("Kruger 2010"), a wholly owned subsidiary of Kruger Inc. In connection with the offering, Kruger 2010, Kruger Products L.P. and the Corporation entered into an Exchange Agreement under which Kruger 2010 may exchange at any time its units of Kruger Products L.P. for common shares of the Corporation on a one-for-one basis, subject to adjustment in accordance with the Exchange Agreement. As of December 13, 2012, Kruger 2010 is the registered holder of 43,009,999 units exchangeable for 43,009,999 common shares of the Corporation, which would represent approximately 84.3% of the Corporation's outstanding common shares.

The offering was made through a syndicate of underwriters led by Scotia Capital Inc. as sole bookrunner, National Bank Financial Inc., RBC Dominion Securities Inc. and TD Securities Inc., and also includes CIBC World Markets Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc. and Canaccord Genuity Corp.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Corporation in any jurisdiction, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom. Any public offering of the securities in the United States may only be made by means of a prospectus containing detailed information about the Corporation and its management as well as financial statements.

About KP Tissue Inc.

KP Tissue Inc. is a corporation created with the sole purpose of acquiring an equity interest in Kruger Products L.P., initially, with the proceeds from the initial public offering of its common shares.

About Kruger Products L.P.

Kruger Products L.P. is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. Kruger Products L.P. serves the Canadian consumer market with such well‐known brands as Cashmere®, Purex®, SpongeTowels®, Scotties®' and White Swan®. In the U.S., Kruger Products L.P. manufactures the White Cloud® brand, as well as many private label products. Kruger Products L.P. has approximately 2,300 employees across North America and operates five FSC® CoC‐ certified mills, four of which are located in Canada and one in the US. For more information, visit www.krugerproducts.ca.

About Kruger Inc.

Founded in 1904, Kruger Inc. is a major producer of tissue (through its retained interest in Kruger Products L.P.), publication papers, lumber and other wood products, corrugated cartons from recycled fibres, green and renewable energy and wines and spirits. Kruger Inc. is also a leader in paper and paperboard recycling in North America. Kruger Inc. operates facilities in Québec, Ontario, British Columbia, Newfoundland and Labrador and the United States. Kruger Inc. is a private company controlled by Joseph Kruger II. The address of Kruger 2010, Kruger Inc. and Joseph Kruger II is 3285 Bedford Road, Montreal, Quebec. For more information, visit www.kruger.com.