Catalyst Paper Clarifies Media Reports on Nature of Recapitalization Process

• the company will be able to repurchase the New Notes for 103 percent of their principal amount until December 15, 2013 and 100 percent thereafter.

The holders of the Senior Secured Notes and the Senior Notes who have signed the Agreement have agreed not to take any action to enforce their rights under the Senior Secured Notes and the Senior Notes, including by accelerating the notes as a result of the company’s current non-payment of interest on the Senior Secured Notes. The Agreement is subject to termination in certain circumstances, including: (i) by the holders of the Senior Secured Notes and Senior Notes in the event that the company does not pay the overdue interest on the Senior Secured Notes on or before January 31, 2012; (ii) by the company if by January 31, 2012 holders of at least 66⅔ percent of the outstanding principal amount of the Senior Secured Notes and Senior Notes have not signed the Agreement or a joinder to the Agreement; and (iii) by the company if by January 31, 2012 a new labour agreement with all union locals at the company’s Canadian mills has not been ratified. The current labour contracts expire April 30, 2012.