Cascades' Subscription Receipt Offering for Gross Proceeds of $200 Million Closes

Kingsey Falls, Quebec, Canada, 20 December 2006 -- Cascades Inc. (TSX: CAS) announced today that it has closed its previously announced offering of 15,095,000 subscription receipts at a price of CAD 13.25 per subscription receipt, for gross proceeds of CAD 200,008,750 (the offering).

The gross proceeds from the offering will be held in escrow pending closing of the acquisition by Cascades of Domtar's 50% interest in Norampac, which is expected to close on 29 December 2006, as a satisfactory response from the Competition Bureau was received on 14 December 2006.

Each subscription receipt entitles the holder to receive, upon closing of the acquisition and without payment of additional consideration or further action, one common share of Cascades. Upon closing of the acquisition, the net proceeds to Cascades, after deducting the underwriters' fee and other expenses of the Offering, will amount to approximately CAD 191 million and will be used to finance a portion of the acquisition.

The subscription receipts will be listed for trading on the Toronto Stock Exchange under the symbol "CAS.R".

The ofering was underwritten by a syndicate jointly led by CIBC World Markets Inc., National Bank Financial Inc., and Scotia Capital Inc., and including BMO Nesbitt Burns Inc., Desjardins Securities Inc., RBC Dominion Securities Inc. and TD Securities Inc.

Cascades also announced that it had closed its concurrent CAD 50 million private placement of subscription receipts at a price of CAD 13.25 per subscription receipt. The gross proceeds from the private placement will also be used to finance a portion of the acquisition.

Founded in 1964, Cascades produces, transforms, and markets packaging products, tissue paper, and fine papers, composed mainly of recycled fibers. Cascades employs nearly 14,300 men and women who work in some 120 modern and flexible production units located in North America and Europe. Cascades' management philosophy, its more than 40 years of experience in recycling, and its continued efforts in research and development are strengths that enable the company to create new products for its customer. The Cascades shares trade on Toronto stock exchange under the ticker symbol CAS.