09Feb

To Our Valued Customers:

I’m writing to provide an important update on our business. Today, we have taken a big step toward concluding our restructuring process, ensuring a strong future for our business.

Leading up to, and since our Chapter 11 filing, we have been working diligently with our lenders to find a solution that would reduce our debt, enhance our liquidity, and best position Appvion for the future. After evaluating options to address our capital structure and conducting extensive negotiations with our lenders, we determined that a sale of the Company would be the best path forward for Appvion. On February 8, 2018, we announced an agreement with a group of our lenders (the “Purchaser”) to become the future owner of our business.

Here’s what the sale process means for our day-to-day business and our customers:

*   Rationale: A sale will allow us to emerge from bankruptcy as a healthier, financially-stable business – with substantially less debt and poised to compete long term in the specialty paper market, further invest in the innovation that has made Appvion a market leader, and continue executing our business strategy. We believe the transaction with the Purchaser will allow us to, among other things, maintain our solid customer relationships.

*   Business as Usual: During the sale process, our business will remain unchanged. We expect that the sale process will be seamless for our stakeholders and will not disrupt our operations, our relationship with you, or our continued fulfillment of orders. And our top priority remains the same – providing the products, service, and value you expect from us.

*   Purchaser: The Purchaser is very familiar with our business and has been a long-term supporter of and lender to Appvion. The proposed deal with the Purchaser would result in a substantially deleveraged balance sheet for our business, and we believe that the Purchaser can help shape our company’s future.

*   Next Steps: The sale process will be managed by us and overseen by the Bankruptcy Court. In this “363 sale process” (called that because it is conducted under Section 363 of the U.S. Bankruptcy Code), the Purchaser has made the “stalking horse” bid, meaning it is the initial bidder for Appvion. Other parties who are interested in buying our business will have the ability to bid against the Purchaser, but their offers must be higher or otherwise better than the initial bid. The sale process timeline will be set at a hearing scheduled for March 1. We expect the sale process to conclude by the end of April, subject to Court approval.

Your business is very important to us, and we highly value our partnership. Please know that we will continue to update you throughout the sale process as events warrant. If you have any questions in the interim, please don’t hesitate to reach out to your usual contacts.

At the end of this process, we will be an even stronger partner to all of our stakeholders – including our customers – in the years to come. Thank you, as always, for your continued support.

Sincerely,

Justin Merritt

Senior Vice President
Sales, Marketing, R&D
Appvion, Inc.
825 E. Wisconsin Ave
Appleton, WI 54912

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