Dunn Paper Obtains Forbearance and New Money Financing from Existing First Lien Lenders

• Dunn Paper Holdings, Inc. (Dunn Paper or the "Company") obtains forbearance related to its missed March 31, 2022 interest payment from senior lenders.
• New money financing  provides liquidity to continue operating the business in the ordinary course, including maintaining valuable relationships with customers and suppliers, and runway to complete a comprehensive financial restructuring to reduce the Company's debt to a sustainable level
• Wade Kemnitz appointed to Chief Executive Officer ("CEO") and is now both President and CEO.
• David Coles of Alvarez & Marsal appointed as Chief Restructuring Officer ("CRO") to assist with the financial restructuring process, enabling the remainder of the Company's officers to focus on operating the business in the ordinary course.
• The Board of Directors expands with the addition of two independent directors, Leslie Lederer and Timothy Pohl.  Mr. Lederer and Mr. Pohl will join Michael Zendan on the Company's Transaction Committee, which will oversee the Company's recapitalization efforts to ensure its capital structure and liquidity position the company for long-term success

ALPHARETTA, Ga., April 22, 2022 /PRNewswire/ -- Dunn Paper, a leading paper, tissue, and packaging products manufacturer announced today that it has obtained a new credit facility in order to facilitate the financial restructuring necessary to strengthen its balance sheet and position the Company for future success. The Company has also obtained a forbearance from its senior lenders related to its missed March 31, 2022 interest payment.

Wade Kemnitz, President and CEO of Dunn said, "Today is an important first step toward a more sustainable capital structure. The new credit facility and the support shown by our lenders demonstrate the underlying value of our business as we execute our business plan and continue operating in the ordinary course with our customers and suppliers."

The proceeds of the new credit facility, together with cash generated from daily operations and cash on hand, will be used to fund operating and recapitalization-related expenses. Dunn's management team will continue to manage both the U.S. and Canadian businesses. The Company expects to use the time afforded to it under the forbearance to negotiate the terms of a value-maximizing transaction that will result in a more sustainable long-term capital structure.

Mr. Kemnitz stated, "The current and recent business environment for pulp and other key inputs has led to declining profitability.  These factors, together with supply chain disruptions and contractions in trade credit, have resulted in elevated leverage. Dunn's focus has always been on serving its customers, acting as a valued partner to its suppliers, and providing a safe, engaging environment for its employees.  Once our recapitalization efforts are complete, I'm confident the Company can return to profitable growth in the various segments in which we excel and where our customers rely on us to serve their packaging and absorbent tissue needs. I'd like to thank our valued customers and suppliers who have supported us over what has been a challenging last twelve months. We intend to continue honoring their ongoing support throughout this process and beyond."

In order to help facilitate the Company's financial restructuring, Dunn Paper's Board of Directors has named David Coles as Chief Restructuring Officer.  Mr. Coles is a seasoned financial restructuring expert and a Managing Director of Alvarez and Marsal, a leading restructuring firm. 

The expansion of the Board augments the Board's capabilities with seasoned paper industry experience and additional restructuring expertise.  The three-person Transaction Committee is tasked with negotiating and promptly implementing a financial restructuring that will position the Company for future success, while causing limited to no disruption to operations.

About Dunn Paper
Dunn Paper is a leading manufacturer and supplier of advanced paper, tissue, and packaging products for use in food, medical, and specialty markets. The company operates 7 paper mills across the United States and Canada and focuses on eco-friendly specialty paper and tissue. Dunn Paper also works with top converters allowing their sustainable paper products to have thousands of potential applications. The company's first mill opened in 1924, and in 2016 the company was acquired by Arbor Investments, a specialized private equity firm with a focus on premier companies in food, beverage, and related industries.

Forward Looking Statement
This press release contains forward-looking statements with respect to our new money credit facility and related matters. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Important factors that could cause our actual results to differ materially from those anticipated in the forward-looking statements include, among other things: (i) the ability of Dunn Paper to develop, prosecute, confirm and consummate a restructuring; (ii) the ability of Dunn Paper to comply with the terms of the new money credit facility; (iii) Dunn Paper's ability to obtain additional financing, as necessary; and (iv) Dunn Paper's ability to retain key management and employees. Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected.

Forward-looking statements speak only as of the date of this release. We undertake no obligation to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based.

Contact:
Jerry Long, CFO [email protected]

SOURCE Dunn Paper

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