KP Tissue Inc. Announces Pricing of Initial Public Offering

MISSISSAUGA, ONTARIO--(Marketwire - Dec. 5, 2012) -

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

KP Tissue Inc. (the "Corporation") announced today that it has entered into an underwriting agreement for the initial public offering of 8,000,000 common shares of the Corporation at a price of $17.50 per share, for total gross proceeds of approximately $140 million (the "Offering"). The proceeds will be used by the Corporation 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 Offering is being 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. (together, the "Underwriters").

The Underwriters have also been granted an over-allotment option to purchase from the Corporation up to an additional 15% of the number of common shares issued under the Offering. 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 Toronto Stock Exchange ("TSX") has conditionally approved the listing of the Corporation's common shares, subject to fulfilling the customary TSX requirements. The common shares of the Corporation are expected to commence trading on the TSX under the symbol "KPT" upon the closing of the Offering. The closing is scheduled for December 13, 2012, subject to customary closing conditions. A copy of the final prospectus will be available on SEDAR (www.sedar.com).

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., initially, with the proceeds from the proposed 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. 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.