Canfor Pulp announces asset write-down and impairment charge

VANCOUVER, British Columbia, Feb. 17, 2026 (GLOBE NEWSWIRE) -- Canfor Pulp Products Inc. (“the Company” or “CPPI”) (TSX: CFX) announced today that it will record a non-cash asset write down and impairment charge totaling approximately $106 million in its fourth quarter of 2025 results. The impairment reflects sustained declines in global US-dollar pulp list prices combined with persistent challenges in securing economically viable fibre.

After taking this asset write-down and impairment charge into consideration, the Company estimates a net debt to total capitalization ratio of 116% at December 31, 2025, and an earnings before interest, tax, depreciation and amortization (“EBITDA”) interest coverage ratio of (0.1) times, as defined under the terms of its operating loan facility.

As announced on December 2, 2025, the Company renegotiated its operating loan facility. Under the terms of the amended agreement, the Company granted security to CPPI’s lenders and obtained a waiver of its financial covenants for the quarter ended December 31, 2025 (the “Covenant Relief Period”).

Following the Covenant Relief Period, the Company continues to be subject to certain financial covenants, including a maximum net debt to total capitalization ratio of 55% and a minimum EBITDA interest coverage ratio of 1.5 times, which is effective if the net debt to capitalization ratio exceeds 42.5%.

Management’s forecasts indicate that due to global pulp market conditions remaining weak and ongoing macroeconomic headwinds, the Company may experience continued declines in financial performance during the first quarter of 2026, making it highly probable that CPPI will not comply with its financial covenants at March 31, 2026.

Although Management is undertaking mitigation initiatives and, as announced on December 3, 2025, advancing an Arrangement Agreement with Canfor Corporation (the “Proposed Transaction”), the ultimate success of these actions cannot be assured at this time. Management’s discussions with its lenders regarding future financial covenant relief are currently on hold, pending the outcome of the Proposed Transaction. Should the Proposed Transaction not close, the Company would re-engage with its lenders for further temporary relief while it works to undertake a restructuring process.

The Company does not expect this news release to have any adverse effect on completing the Proposed Transaction.

Forward-looking statements.

Certain statements in this press release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. These forward-looking statements include, among others, statements relating to: the recording of an impairment charge; the expected non-compliance with financial covenants; the Company’s intention to re-engage with its lenders for further temporary relief; and, the Company does not expect this news to have any adverse effect on completing the Proposed Transaction. Words such as “expects”, “anticipates”, “projects”, “intends”, “plans”, “will”, “believes”, “seeks”, “estimates”, “should”, “may”, “could”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on current expectations and beliefs and actual events or results may differ materially.

Although the Company believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from the expectations of the management of the Company, respectively, and plans as set forth in such forward-looking statements, including, without limitation, the following
factors, many of which are beyond the Company’s control and the effects of which can be difficult to predict: it is uncertain if future temporary relief of from financial covenants can be obtained or, if obtained, if such relief would be on terms and conditions acceptable to the Company; the possibility that the Proposed Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required court, shareholder and regulatory approvals and other conditions of closing necessary to complete the Proposed Transaction or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from this announcement; the possibility of litigation relating to the Proposed Transaction; credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Proposed Transaction, including changes in economic conditions, interest rates, commodity prices, tariffs, duties and import taxes; risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business; and other risks inherent to the Company’s business and/or factors beyond its control which could have a material adverse effect on the Company or the ability to consummate the Proposed Transaction. With respect to the forward-looking statements contained in this news release, the Company has made numerous assumptions regarding, among other things, the ability of Canfor Corporation and the Company to satisfy all of the closing conditions to complete the Proposed Transaction and the non-occurrence of the risks and uncertainties that are described in the public filings of the Company or other events occurring outside of its normal course of business.

The Company cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause the Company’s actual results to differ from current expectations, please refer to the “Risks and Uncertainties” section of the Company’s Management’s Discussion & Analysis for the year ended December 31, 2024, as well as the Company’s other public filings, available at www.sedarplus.ca and at canfor.com.

The forward-looking statements contained in this news release describe the Company’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

About Canfor Pulp.

Canfor Pulp is a leading global supplier of pulp and paper products with operations in the northern interior of British Columbia. Canfor Pulp operates two mills in Prince George, British Columbia, with a total capacity of 480,000 tonnes of Premium Reinforcing Northern Bleached Softwood Kraft pulp and 140,000 tonnes of kraft paper. The Common Shares are traded on the TSX under the symbol CFX. For more information visit canfor.com.