KP Tissue Announces Closing of Over-Allotment Option and Subscription for Additional Units of Kruger Products

MISSISSAUGA, ONTARIO--(Marketwire - Jan. 10, 2013) -

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

KP Tissue Inc. (TSX:KPT) (the "Corporation") announced today that it has completed the issuance of 750,000 common shares at a price of $17.50 per common share pursuant to the partial exercise of the over-allotment option granted to the syndicate of underwriters led by Scotia Capital Inc., as sole bookrunner, National Bank Financial Inc., RBC Dominion Securities Inc. and TD Securities Inc., and which also includes CIBC World Markets Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc. and Canaccord Genuity Corp. (together, the "Underwriters").

The over-allotment option was granted by the Corporation to the Underwriters in connection with the Corporation's previously announced initial public offering of common shares which was completed on December 13, 2012.

The Corporation will use the proceeds from the partial exercise of the over-allotment option to subscribe for 750,000 additional units of Kruger Products L.P. which, together with the units of Kruger Products L.P. that it already holds, will result in the Corporation having a 16.9% interest in Kruger Products L.P. The remaining 83.1% interest in Kruger Products L.P. is held by Kruger Products 2010 L.P., a wholly-owned subsidiary of Kruger Inc.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Corporation in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. No securities regulatory authority has either approved or disapproved of the contents of this news release. 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.

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. Kruger Products L.P. is currently a wholly-owned subsidiary of Kruger Inc. For more information visit www.krugerproducts.ca.

About Kruger Inc.

Founded in 1904, Kruger Inc. is a major producer of tissue, 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. For more information, visit www.kruger.com.