Mr. Paul Rivett reports

GREENFIRST ANNOUNCES LAUNCH OF RIGHTS OFFERING AND PROVIDES UPDATE ON CLOSING OF PLAN OF ARRANGEMENT

Further to the press releases dated Sept. 19, 2024, and Oct. 2, 2024, Greenfirst Forest Products Inc. anticipates that closing of the proposed plan of arrangement that will result in the distribution of the outstanding shares of Kap Corp. to the Greenfirst shareholders on the basis of one common share of Kap for every 10 common shares of Greenfirst (after taking into account the 1:10 consolidation completed on Oct. 17, 2024) held will occur on Nov. 4, 2024.

The company is also announcing a rights offering to raise gross proceeds of up to $96.9-million by issuing up to 17,722,410 common shares in the capital of the company at a price of $5.47 per share representing a 25-per-cent discount to the company's five-day VWAP (volume-weighted average price) ended on Oct. 30, 2024. The company has entered into a standby purchase agreement, pursuant to which Ravenswood Investments III LP and The Ravenswood Investment Company LP, two funds managed by Robotti & Co. Advisors LLC. Under the standby purchase agreement, the standby purchasers have agreed to purchase up to an aggregate of 3,656,307 Greenfirst shares not otherwise purchased under the rights offering for a commitment of up to $20-million. Proceeds from the rights offering will be used to support an off-cycle capital expenditure program that will drive great operational productivity and future earnings.

"Over the last 18 months, we have executed on our stated goals of eliminating the Rayonier sawmill acquisition debt, selling excess land, disposing of underperforming Quebec sawmills, removing pension liability, decentralizing the newsprint business and reducing corporate overhead," said Paul Rivett, chair of Greenfirst. "We are now a pure play lumber business in the best wood fibre basket and business-friendly jurisdiction -- Ontario, with an excellent off-cycle opportunity to reposition our production in the top quartile."

"The backstopped rights offering will provide us with the capital necessary to quickly purchase and install equipment that will drive our operations to top-quartile productivity at the low end of the lumber commodity cycle when the equipment is cheapest and installation is the fastest. These initiatives will strengthen Greenfirst's competitiveness in the long term. We aim to be ready before the market's recovery," said Joel Fournier, Greenfirst's chief executive officer.

"Upon the completion of the rights offering and the execution on our off-cycle capital expenditure program, Greenfirst will have a much stronger balance sheet than many of our competitors and, importantly, greater future earnings throughout much of any expected lumber cycle," said Peter Ferrante, Greenfirst's chief financial officer.

Bob Robotti, chief investment officer of Robotti & Co. Advisors, the investment adviser for the standby purchasers, stated: "Greenfirst common shares represent an investment in a cyclical industry at a countercyclical time. We believe that Greenfirst's assets are now in capable hands and that management is opportunistically taking thoughtful steps to realize their latent earnings power. We are happy to be a catalyst to help capture that opportunity." Robotti & Co. Advisors is a U.S. Securities and Exchange Commission registered investment adviser. Robotti & Co. Advisors and its predecessor have repeatedly and successfully invested in different cyclical industries during the offcycle.

Details of the rights offering

Pursuant to the rights offering, the company will be offering 17,722,410 rights to holders of Greenfirst shares as at the close of business on Nov. 7, 2024, on the basis of one right for each one Greenfirst share held. Each one right will entitle the holder to subscribe for one Greenfirst share at the subscription price of $5.47 per Greenfirst share. Holders of rights will not be eligible to participate in the spinout in respect of Greenfirst shares acquired on the exercise of rights.

Upon completion of the rights offering and assuming all rights are exercised, the company will have 35,444,820 Greenfirst shares outstanding, of which Greenfirst shares issued under the rights offering represent 50 per cent of the outstanding shares.

The period during which the rights may be exercised under the rights offering will begin on the record date and will end at 5 p.m. Toronto time on Dec. 11, 2024, after which time unexercised rights will be void and of no value.

Commencing on Nov. 7, 2024, the rights will be listed on the Toronto Stock Exchange under the symbol GFP.RT and will continue to be posted for trading on the TSX until 12 p.m. Toronto time on the expiry date, at which time they will cease trading.

Shareholders who fully exercise their rights under the basic subscription privilege will be entitled to subscribe for additional Greenfirst shares, if available, as a result of unexercised rights prior to the expiry time on the expiry date, subject to certain limitations as set out in the company's rights offering circular dated Oct. 31, 2024, which will be filed on SEDAR+ under the company's profile, along with the notice of rights offering on Form 45-106F14. The notice and the circular will be mailed to shareholders in the eligible jurisdictions (as defined herein) as of the record date on or about Nov. 7, 2024. The company expects to close the rights offering on or before Dec. 13, 2024.

The rights will be offered to shareholders resident in all provinces and territories of Canada (the eligible jurisdictions). Registered shareholders in the eligible jurisdictions who wish to exercise their rights must forward the completed subscription form, together with the applicable funds, to the rights agent, Computershare Investor Services Inc., on or before the expiry time on the expiry date. Shareholders who own their Greenfirst shares through an intermediary (such as a bank, trust company, securities dealer or broker) will receive materials and instructions from their intermediaries.

Subject to the detailed provisions of the circular, rights certificates or DRS advices and subscription forms will not be mailed to shareholders resident outside of the eligible jurisdictions, unless such shareholders are able to establish to the satisfaction of the company that they are eligible to participate in the rights offering and provide such evidence to the company and the rights agent of the same.

In connection with the rights offering, Greenfirst has entered into a standby purchase agreement with the standby purchasers, pursuant to which the standby purchasers have agreed to collectively purchase, at the exercise price, up to 3,656,307 Greenfirst shares that are not otherwise subscribed for under the rights offering such that at least $20-million of Greenfirst shares are issued. In consideration for providing the backstop commitment, the standby purchaser will be paid a cash fee of $1-million and will be issued 161,454 Greenfirst shares at a price of $6.1937 per Greenfirst share. The standby purchasers will also be granted customary nomination rights in respect of one independent director so long as they collectively hold at least 5 per cent of the issued and outstanding Greenfirst shares and customary registration rights for so long as they collectively hold at least 10 per cent of the issued and outstanding Greenfirst shares.

About Greenfirst Forest Products Inc.

Greenfirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production. The company owns four sawmills located in rich wood baskets, proudly operating over six million hectares of FSC-certified (Forest Stewardship Council) public Ontario forest lands (FSC-C167905). The company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide Greenfirst with significant cyclical and secular advantages in building products.

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