Marathon Pulp Inc., Marathon, ON, says it has a filed a notice of intention to make a proposal under the Bankruptcy and Insolvency Act (Canada). Weak pulp markets have "negatively impacted Marathon's cash flow to the point where it could no longer meet its ongoing financial obligations", the company said in a press release.

The mill is on an indefinite shut-down.

Marathon is a joint venture of Tembec Inc. and Kruger Inc., both based in Montreal, QC. The mill capacity is 186 000 tonnes/year of NBSK.

Tembec said it would cease proportionately consolidating the financial results of Marathon in its financial statements. This will result in a one-time gain of $3 million in the March 2009 quarter. During the 12-month period ended December 27, 2008, the joint venture had increased Tembec's reported sales by $61 million and had generated EBITDA of $2 million.

www.tembec.com

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