MIRA INFORM REPORT

Report Date :

29.03.2011

IDENTIFICATION DETAILS

Correct Name :	TEMBEC INC

Registered Office :	800, Boul. René-Lévesque O, Bur. 1050, Montréal (Québec), H3b1x9

Country :	Canada

Financials (as on) :	25.09.2010 Consolidated

Date of Incorporation :	10.10.2001

Legal Form :	Corporation for Profit

Line of Business :	Forest Products Company

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	1,500,000 USD
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – December 31, 2010

Country Name

Previous Rating

(30.09.2010)

Current Rating

(31.12.2010)

Canada

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

GEOPOLITICS - CANADA

POLITICAL DATA

ECONOMIC DATA

Form of Government: Federal

Economic Risk: Nil

Currency: USD

Branch Situation: Stable

IDENTIFICATION

Ordered as:	Temcell
Address in the order:	800 Boul Rene LeveSque Suite 1050 Montreal Quebec H3B 1X9
Comments on data supplied:	Dear client, At the location you provided we found the company's TEMBEC NC registered in Quebec. Indeed, in 2001, the company was previously name Temcell.
Legal Name:	TEMBEC INC
Legal Address	800, BOUL. RENÉ-LÉVESQUE O, BUR. 1050, MONTRÉAL (QUÉBEC), H3B1X9
Telephone:	+1 (514) 871-01 37	Document Number :	1160369386
Fax:	+1 (514) 397-08 96	Legal Form:	Corporation for Profit
Email:	NA	Registered in:	Quebec
Website:	www.tembec.com	Date Created:	1972
Manager:	LOPEZ, JAMES, President	Date Incorporated:	October 10th, 2001
Staff:	4,300 employees	Stock:	100,000,000 shares
		Value:	NA
Activity:	Forest products company

BANKS

Name of the Bank	ROYAL BANK OF CANADA
Name of the Bank	TORONTO DOMINION BANK
Name of the Bank	BANK OF NOVA SCOTIA
Name of the Bank	BANK OF MONTREAL
Name of the Bank	CANADIAN IMPERIAL BANK OF COMMERCE

BUSINESS

HISTORY
	TEMBEC INDUSTRIES INC is a private company created in 1972 and based in Quebec. In 2001, the company was named TEMCELL. In February 2008, a timely and successful recapitalization process was completed to provide the Company and its operation subsidiaries additional liquidity. In September 04th, 2008, Tembec Industries Inc filed for protection under Chapter 15 of the U.S. bankruptcy code with the U.S. bankruptcy court in Manhattan, a court filing showed. Tembec has more than $1 billion of both assets and debts, according to the filing. Chapter 15 covers cross-border insolvencies and allows non-U.S. companies to reorganize outside the United States without having to face U.S. lawsuits and claims by creditors. February 21, 2011, Tembec announced today the permanent closure of its Taschereau sawmill. The facility has been idle since October 2009. The closure is necessitated by the reality that there is insufficient sustainable timber supply to operate all of Tembec’s sawmills in the Abitibi-Témiscamingue region. Tembec will work with the affected employees to minimize the impact of the closure, including potential transfers to other Tembec operations.
PRINCIPAL ACTIVITY
	Tembec Inc, an integrated forest products company, engages in the production and sale of forest, pulp, and paper products. It operates in four segments: Forest Products, Dissolving and Chemical Pulp, High-Yield Pulp, and Paper.
Products/Services description:
	The Forest Products segment produces a range of commodity and value-added forest products, such as softwood lumber, hardwood lumber, hardwood flooring, pine lumber, and finger jointed lumber. The Dissolving and Chemical Pulp segment consists primarily of manufacturing and marketing activities of dissolving and chemical pulps, including the transformation and sale of resins and pulp by-products. The High-Yield Pulp segment includes the manufacturing and marketing activities of high-yield pulps. The Paper segment produces newsprint for use in publishing papers and paperback books, and bulk paper used in specialty publishing and printing. This segment also offers lightweight Kallima grades of coated covers and bleached paperboard, and premium bleached linerboard that are used in commercial printing, publishing, prestige packaging, high-impact graphic corrugated containers, point-of-purchase displays, and litho-laminated packaging.
Sales are:
	Wholesale
Clients:
	Companies
Operations area:
	National, International
The company imports from Worldwide
The company export to USA, Korea, Japan and China
Trade References:
	- Georgia-Pacific (Atlanta)
The subject employs 4,300 employee(s)
PAYMENTS
	made on a 55 days basis - monitored over the last 12 months
LOCATION
Headquarters
	The company is headquartered at the above address.
Branches:
	The company has several branches in Canada.

Shareholders - Manager - Related Companies

Listed at the stock exchange:
	YES
Shareholders Parent Company(ies):
	JAMES V. CONTINENZA, Chairman of the Board, Tembec Inc. JAMES M. LOPEZ, President and Chief Executive Officer, Tembec Inc. NORMAN M. BETTS, Associate Professor, Faculty of Administration, JAMES E. BRUMM, Corporate Director JAMES N. CHAPMAN, Corporate Director FRANCIS M. SCRICCO, Corporate Director DAVID J. STEUART, Corporate Director LORIE WAISBERG, Corporate Director
Management:
	JAMES V. CONTINENZA Chairman of the Board JAMES M. LOPEZ President and Chief Executive Officer CHRIS BLACK Executive Vice President, President, Paper Group MICHEL J. DUMAS Executive Vice President, Finance and Chief Financial Officer PATRICK LEBEL Vice President, General Counsel and Corporate Secretary STEPHEN J. NORRIS Treasurer YVON PELLETIER Executive Vice President, President, Pulp Group DENNIS ROUNSVILLE Executive Vice President, President, Forest Products Group RICHARD TREMBLAY Corporate Controller JOHN VALLEY Executive Vice President, Business Development and Corporate Affairs
Related Companies:
	The company has several subsidiaries around the World. Among them: - Tembec SAS - Envirofinance SAS - Tembec Energie SAS - Bioenerg SAS

Financials - COMMERCIAL TRENDS AND FORECAST

The subject is a public company traded at the Toronto Stock Exchange under the symbol "TMB". Please find enclosed the financial statements.

Comments on the financial data:

Tembec announces new $200 million asset-based secured revolving credit facility.

Temiscaming, Quebec, March 4, 2011 – Tembec today announced that it had entered into a new $200 million asset-based secured revolving credit facility with GE Capital and CIBC. The new five-year facility expires in February 2016 and will effectively replace an existing $205 million revolving credit facility that would have expired in December 2011. The new facility has a first priority charge over the receivables and inventories of the Company’s Canadian operations. The terms of the new facility will provide for an increase in availability of approximately $60 million due primarily to a reduction in borrowing base reserves. After giving effect to the increased availability, the Company’s total liquidity (cash and available revolving lines of credit) will be approximately $190 million.

The Company had previously indicated that the refinancing of the revolving credit facility was a priority.

Legal Fillings

The sources consulted record no detrimental legal or labor court information.

Rating

Local credit bureau gave a good credit rate.

The company is in Good Standing. This means that all local and federal taxes were paid on due date.

Final Opinion

This is big size company with several years of experience in the business.

Looking at the company's financials, we can see that the company is no longer losing money

Indeed the company's profitability in 2010 is correct, the lenght of payment is regular

Moreover, the company's income is pretty satisfying and has increased in 2010.

The company's debt level is nevertheless medium

At this time, we believe that the company can bear a credit line in the range of 1,500,000 USD

SUMMARY

FINANCIAL SUMMARY		DEBT COLLECTIONS AND PAYMENTS
Profitability	CORRECT	Public	NO
Indebtedness	MEDIUM	Payments	REGULAR
Cash	NORMAL

APPENDIX

Person Interviewed
	Stephen Norris
Position
	Treasurer
Comments
	He was able to confirm us all the information in the report.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.78
UK Pound	1	Rs.71.64
Euro	1	Rs.62.96

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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