Pope & Talbot Announces Agreement with Lenders

    PORTLAND, ORE., August 6 /CNW/ - Pope & Talbot, Inc. (NYSE:  POP) today
announced that it entered into a forbearance agreement with its senior secured
lenders to extend access to liquidity provided by the revolving credit
facility under its senior secured credit agreement for six weeks while it
continues to explore options to improve its balance sheet. The forbearance
agreement requires the Company to expand those efforts during the six-week
forbearance period to include soliciting offers to purchase all or
substantially all of the Company's assets or equity interests.

    As Pope & Talbot previously disclosed would be likely, it is out of
compliance with a financial covenant in its senior secured credit agreement
calculated as of June 30, 2007. The covenant requires the Company to maintain
a certain minimum EBITDA -- generally earnings before interest, taxes,
depreciation and amortization with certain additional modifications as set
forth in the credit agreement. The Company was unable to generate the EBITDA
required under its credit agreement for the four-quarter period ended June 30,
2007 and therefore is in default under the credit agreement. Pope & Talbot
expects to report earnings for the second quarter of 2007 and file its Form
10-Q quarterly report on August 9, 2007.

    Pope & Talbot has entered into a forbearance agreement dated as of July
31, 2007 with its secured lenders. Pursuant to the agreement, the lenders have
agreed that, until September 17, 2007, the Company will continue to have
access to its revolving credit facility with total availability of $67
million. The agreement also provides for default rate interest to be paid
effective July 1, 2007 and a forbearance fee, and for the implementation of a
mechanism, similar to that which exists in other corporate asset-based loans,
through which cash in the Company's deposit accounts will be used to repay
borrowings under the revolving credit facility on a daily basis and
correspondingly increase availability under the facility.

    Although the Company may seek further forbearance or other relief from
its senior lenders when the current agreement expires on September 17, 2007,
it cannot provide any assurance that it will be successful in obtaining such
further forbearance or other relief, or as to the terms upon which such
forbearance or other relief may be granted. Even if the Company is successful
in obtaining additional covenant relief, it will continue to be challenged in
its ability to maintain adequate levels of liquidity relative to the size of
its operations. Accordingly, the Company is continuing to explore alternatives
to strengthen its balance sheet and generate cash, including one or more
possible asset sales or other capital infusions, and is analyzing its ability
to restructure its debt and other liabilities. The Company has retained
Rothschild Inc. to assist in those efforts.

    Caution Regarding Forward-Looking Statements:

    This press announcement and other Company communications may contain
statements relating to future performance of the Company that are
forward-looking statements. These statements relate to the Company's future
plans, objectives, expectations and intentions and may be identified by words
like "believe," "expect," "may," "will," "should," "seek," or "anticipate,"
and similar expressions. The Company cautions readers that any such
forward-looking statements are based on assumptions that the Company believes
are reasonable, but are subject to a wide range of risks including, but not
limited to, risks associated with future financial results and liquidity
including the Company's continued ability to finance its operations in the
normal course, the continuation of the forbearance agreement without the
occurrence of a termination event thereunder or the potential necessity for
additional forbearance agreements, the possibility that the Company may need
to commence bankruptcy proceedings, fluctuation of the borrowing base and
other limitations that may affect the Company's ability to borrow under its
revolving credit facilities or otherwise, the Company's relationship with and
payment terms provided by its trade creditors, additional financing
requirements, the results of renegotiating certain key commercial agreements,
the effect of commodity and raw material prices, foreign currency
fluctuations, the effect of U.S. housing market conditions and other
uncertainties previously detailed in the Company's filings with the SEC. Due
to these uncertainties, there is an inherent risk that actual results will
differ materially from any forward-looking statements. The Company is under no
obligation to (and expressly disclaims any such obligation to) update or alter
any forward-looking statements whether as a result of new information, future
events or otherwise.

For further information:

For further information: For Pope & Talbot, Inc. Mark Rossolo,

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