Catalyst Paper Corporation says that it has been advised that the four largest shareholders of the Company holding or controlling approximately 79% of the Company's outstanding common shares, that include Mudrick Capital Management, L.P., Cyrus Capital Partners, LP, Oaktree Capital Management, LP and Stonehill Capital Management LLC (collectively, the "Principal Securityholders") have entered into a support agreement with Kejriwal Group International ("KGI"). The Principal Securityholders have filed Schedule 13D with the United States Securities and Exchange Commission setting out the details of the support agreement.

The support agreement has been entered into between KGI and the Principal Securityholders following previously disclosed discussions. The Company is not a party to the support agreement, nor has it been a party to the discussions that led to it.

The support agreement among KGI and the Principal Securityholders includes material conditions and other provisions including satisfactory due diligence by KGI to occur over a period of up to 75 days, the refinancing or maturity extensions of the existing credit facilities of Catalyst, securityholder, regulatory and court approvals, and funding at closing. The support agreement contemplates an outside date to complete the transaction of November 30, 2016, subject to extension.

The Board of Directors has not yet entered into any discussions regarding the potential transaction with KGI or agreed to the contemplated process and timeline set forth in the support agreement. The Board of Directors is encouraged by KGI's proposal and will be pleased to review and evaluate the proposed transaction and the process contemplated by the support agreement with the assistance of legal and financial advisers.