UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-K

[x]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934:

                   For the fiscal year ended December 31, 1998
                           Commission File No. 0-16289

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934


                             REPAP ENTERPRISES INC.
             (Exact name of Registrant as specified in its charter)

CANADA                                                  98-0178526
(State or other Jurisdiction of            (I.R. S. Employer Identification No.)
incorporation or organization)

300 Atlantic Street, Suite 200                                06901
Stamford, Connecticut
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code:     (203) 964-6160

Securities registered pursuant to Section 12(b) of the Act:

                                      None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common shares


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period




<PAGE>



that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. [X] Yes  [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

The aggregate  market value of the Common shares held by  non-affiliates  of the
registrant  as of March 29,  1999 was  $47,221,088.10.  As of March 29, 1998,
there were 768,460,637 Common shares outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

The Registrant's 1998 Annual Report to Shareholders is incorporated by reference
into Parts I, II and IV of this report. The Registrant's Management Proxy
Circular for the 1999 Annual Meeting of Shareholders is incorporated by
reference into Part III of this report. Only those sections of the Annual Report
to Shareholders and the Management Proxy Circular referred to in Parts I, II,
III and IV are deemed "filed" as part of this Form 10-K report.



                                        2

<PAGE>



FORM 10-K Table of Contents
                                                                            PAGE

EXCHANGE RATES                                                                 4

PART I
--------------------------------------------------------------------------------

1.     Business................................................................6
       (a)      General Description of Business................................6
       (b)      Financial Information about Industry Segments..................8
       (c)      Principal Products.............................................8
       (d)      Customers......................................................9
       (e)      Raw Materials.................................................10
       (f)      Human Resources.............................................. 10
       (g)      Research and Development......................................11
       (h)      Environment ..................................................11
       (i)      Executive Officers of the Registrant..........................11
2.     Properties.............................................................12
3.     Legal Proceedings......................................................12
4.     Submission of Matters to a Vote of Security Holders....................13

PART II
--------------------------------------------------------------------------------

5.     Market for Registrant's Common Equity and
       Related Stockholder Matters............................................14
6.     Selected Financial Data................................................15
7.     Management's Discussion and Analysis of Financial Condition
       and Results of Operations..............................................16
7A.    Quantitative and Qualitative Disclosures About Market Risk.............16
8.     Financial Statements and Supplementary Data............................16
9.     Changes in and disagreements with Accountants
       on Accounting and Financial Disclosure.................................16

PART III
--------------------------------------------------------------------------------

10.    Directors and Executive Officers of the Registrant.....................17
11.    Executive Compensation.................................................17
12.    Security Ownership of Certain Beneficial Owners and Management.........17
13.    Certain Relationships and Related Transactions.........................17

PART IV
------------------------------------------------------------------------------

14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.......18
       (a)(1)   Documents.....................................................18
          (2)   Financial Statement Schedules.................................18
          (3)   Exhibit Index.................................................18
       (b)      Reports on Form 8-K...........................................23



                                        3

<PAGE>




                                 EXCHANGE RATES

Repap Enterprises Inc. publishes its consolidated financial statements in
Canadian dollars. In this annual report, unless otherwise specified or the
context otherwise requires, all dollar amounts are expressed in Canadian dollars
("$", "Cdn.$", "dollars" or "Cdn. dollars").

The Government of Canada permits a floating exchange rate to determine the value
of the Canadian dollar against the United States dollar ("U.S.$" or "U.S.
dollar"). The exchange rates at the end of each of the five years ended December
31 and the average, the high, and the low exchange rates, being the noon buying
rates in New York City for cable transfers in Canadian dollars as certified for
customs purposes by the Federal Reserve Bank of New York expressed in U.S.
dollars, for each of those periods were as follows:

                                           U.S.$ per Cdn.$
                                           ---------------                      
                                             December 31,

                                             Years Ended
                        1998         1997        1996         1995        1994
                        ----         ----        ----         ----        ----
At end of year(1)      .6552        .6997       .7301        .7323       .7128

Average for year(2)    .6830        .7222       .7226        .7305       .7300

High for year          .6822        .7496       .7513        .7527       .7628

Low for year           .6341        .6945       .7235        .7023       .7103


------------------------------------
(1)  Noon buying rate on last banking day
(2)  Based on the average of the daily buying rates during the year.

On March 26, 1999, the U.S.$ exchange rate was U.S.$0.6607 per Cdn.$1.00.

                           Forward-Looking Statements

This Annual Report on Form 10-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical facts included in this Form 10-K , including, without limitation, the
statements under Item 7 "Management's Discussion and Analysis of Financial
Condition and Results of Operations", Item 1 "Business" and located elsewhere
herein regarding industry prospects, the Corporation's prospects and the
Corporation's financial position are forward-looking statements. Although the
Corporation believes that the expectations reflected in those forward-looking
statements are reasonable, there can be no


                                        4

<PAGE>



assurance that those expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
Corporation's expectations include, without limitation, general economic
conditions, changes in the coated paper, pulp or lumber environment, changes in
customer budgets, unusual weather patterns, competition from existing and
potential competitors, pricing pressures and the cost of labor, supplies and
other costs and expenses, and other factors disclosed in this Form 10-K (the
"Cautionary Statements"). All subsequent written and oral forward-looking
statements attributable to the Corporation or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.



                                        5

<PAGE>



PART I

Item 1. Business.

(a) General Description of Business
    -------------------------------

Repap Enterprises Inc. (the  "Corporation")  was incorporated  under the laws of
Canada  on  January  9,  1963  and  was  continued  under  the  Canada  Business
Corporations  Act  on  April  9,  1980.  The  Corporation,   together  with  its
subsidiaries  (collectively  "Repap"),  currently carries on business as a North
American  coated  groundwood  paper  company.  Repap's  coated paper  operations
consist  of a fully  integrated  coated  groundwood  paper  facility  located in
Miramichi, New Brunswick, Canada that is owned by the Corporation's wholly owned
subsidiary,  Repap New  Brunswick  Inc.  ("Repap  New  Brunswick"),  a  Canadian
corporation.

Prior to 1998, the Corporation's  assets included a pulp mill and three sawmills
in British  Columbia,  an  unbleached  pulp and Kraft  paper mill and sawmill in
Manitoba and coated paper mills in Wisconsin and New Brunswick. During 1997, the
British  Columbia,  Manitoba  and  Wisconsin  operations  were sold or otherwise
disposed  of  and  no  longer  form  part  of  the  ongoing  operations  of  the
Corporation. As of December 31, 1997, Repap's only production facilities were in
New  Brunswick.  Repap  has its  executive  offices  and sales  headquarters  in
Connecticut.

Repap New Brunswick's coated paper mill produces coated groundwood paper with an
annual  capacity  of  492,000  tons.  The New  Brunswick  coated  paper  mill is
integrated with a Kraft pulp mill which has an annual capacity of 235,000 metric
tons ("metric  tons") of northern  bleached  softwood  Kraft ("NBSK") pulp and a
groundwood  pulp mill which has an annual  capacity  of 123,000  metric  tons of
groundwood  pulp.  Repap New Brunswick also operates two sawmills with an annual
production capacity of 58 Mmfbm (million foot board measures).  The coated paper
operations of Repap New Brunswick are ISO 9002 certified.

In May 1996,  the Board of Directors  of Repap  retained  financial  advisors to
assist it in identifying strategic  alternatives available to Repap, including a
sale or merger.  During this process Repap British  Columbia Inc. a wholly owned
subsidiary of the  Corporation  sought  protection  from its creditors under the
Companies' Creditors Arrangement Act (Canada) and the Corporation's  interest in
that  subsidiary  was  surrendered  to Repap  British  Columbia  Inc.'s  secured
lenders.  The strategic  alternatives  program culminated in the sale in 1997 of
the  Corporation's  unbleached pulp and Kraft paper mill and sawmill in Manitoba
and its  coated  paper  mill in  Wisconsin.  The net  proceeds  of these  sales,
approximately $35 million and US$227 million,  respectively,  were used to repay
indebtedness  of the  Corporation,  to  invest in Repap  New  Brunswick  and for
general corporate purposes.

On August 1, 1997 the Corporation repaid all of its 8.5% Convertible  Debentures
due on that date by issuing 619,023,800 Common shares to the holders of its 8.5%
Convertible


                                        6

<PAGE>



Debentures.  At the same time as these shares were issued,  the  resignations of
the Chief  Executive  Officer and the Chief  Financial  Officer as directors and
officers of the Corporation were sought and received.  Also at that time, six of
the  Corporation's  remaining  directors  resigned.  Mr. Stephen C. Larson,  the
Corporation's   President  and  Chief  Operating  Officer,   was  appointed  the
Corporation's  President and Chief Executive Officer. Mr. William J. Anderson, a
director of Silverton  International  Fund  Limited,  the  Corporation's  single
largest  shareholder,  became the  Chairman of the  Corporation.  Mr.  Anderson,
together with Mr. Robert Poile and Mr. David McAusland, were appointed directors
of the Corporation.

On February 20, 1998 the  Corporation  sold to Tembec Inc. all of the issued and
outstanding shares in the capital of Alcell Forest Products Inc., the subsidiary
which  acquired  a  125,000  tonne-per-year  magnesium-bisulphite  Pulp  Mill in
Atholville,  New  Brunswick  from  Noranda  Forest Inc. in  December  1994.  The
purchase price was $1 million in cash and 10,000 6.75% redeemable Class B shares
in the  capital of AV Cell Inc.,  the  acquiring  corporation  formed as a joint
venture  between  Tembec Inc. and the Aditya  Birla Group.  At the same time the
Province of New  Brunswick  released  the  Corporation  from its  obligation  to
provide  recourse to the  Province on the  province's  $37 million  guarantee of
Alcell Forest Products Inc.'s bank debt. As consideration for this release,  the
Corporation  transferred  to the Province  the 10,000  Class B shares,  paid the
Province $12 million and issued to the Province a $5 million promissory note due
2013.

On May  15,  1998,  the  Corporation  issued  a  US$45  million  6%  convertible
subordinated  debenture  due  2005 to  Enron  Capital  & Trade  Resources  Corp.
("ECT").  The net  proceeds  from this issue  together  with  approximately  $15
million of the Corporation's general funds were used to redeem the Corporation's
$75 million 9%  convertible  subordinated  debentures  due June 30, 1998. At the
same time Repap New Brunswick and ECT entered into three  agreements,  namely, a
pulp agency  agreement  whereby Repap New Brunswick  appointed ECT its exclusive
agent for the marketing and sale of its market pulp; an energy advisory  service
agreement  whereby ECT was to provide Repap New Brunswick  with energy  advisory
services and be  compensated  based upon the savings  generated  from the advise
given; and an International Swap Dealers Association, Inc. Master Agreement.

On June 4, 1998,  Repap New Brunswick  completed the issuance of US$200  million
aggregate  principal  amount of its 9% First  Priority Fixed Rate Senior Secured
Notes due 2004 and the  incurrence  of US$120  million in  Floating  Rate Senior
Secured Loans due 2004. The net proceeds from these notes and loans were used to
fund a tender offer for Repap New  Brunswick's 9 7/8% First  Priority Fixed Rate
Senior  Secured  Notes  due 2000 and its First  Priority  Floating  Rate  Senior
Secured Notes due 2000.  Substantially  all of the 9 7/8% First  Priority  Fixed
Rate Senior Secured Notes due 2000 and all of the First  Priority  Floating Rate
Senior Secured Notes due 2000 were tendered pursuant to this offer. The 9% First
Priority  Fixed Rate Senior  Secured Notes due 2004 were  exchanged on September
16, 1998 for US$ 200 million 9% First  Priority  Fixed Rate Senior Secured Notes
due 2004 that have been registered under the Securities Act of 1933.



                                        7

<PAGE>



The Corporation  has been  unsuccessful in its attempts to sell its wholly owned
subsidiary,  Alcell  Technologies  Inc.,  which owns a research and  development
solvent pulping facility  located  adjacent to Repap New Brunswick's  Kraft pulp
mill.  This  facility  has been shut down since April 1996 and is carried on the
books of the Corporation at nil value. The Corporation has ceased its efforts to
sell this subsidiary and has permanently closed the operations.  The Corporation
has no liability  for the amounts owed by Alcell  Technologies  Inc. to Industry
Canada.  The  Corporation's   research  and  development  efforts,   which  have
previously been conducted by Repap Technologies Inc., are now performed by Repap
New Brunswick at rented facilities in Miramichi.

On December 31, 1998, the Corporation  declined to proceed with the amalgamation
between itself and its wholly owned subsidiary Repap New Brunswick.

On  February  8, 1999 the  Shareholder  Protection  Rights  Plan  adopted by the
Corporation in 1994 expired.  On February 22, 1999, the  Corporation's  board of
directors  decided against  requesting the shareholders to adopt a new plan with
the same or  similar  terms on the basis  that such  plans are  perceived  as an
effort to protect current management and discourage  potential  acquirers of the
Corporation.

(b) Financial Information about Industry Segments and Geographic Segmentation
    -------------------------------------------------------------------------   

For certain  financial  information for each of the industry segments during the
three years ended  December  31,  1998,  and for certain  information  regarding
geographic  segmentation,  see note 19 to the  Notes to  Consolidated  Financial
Statements  contained in the Corporation's 1998 Annual Report attached hereto as
Appendix  A and filed  herewith  as an  exhibit,  which  Consolidated  Financial
Statements are incorporated herein by reference.

(c) Principal Products
    ------------------

Coated Paper
Coated  groundwood  paper is used primarily for magazine  publishing and is also
used by commercial  printers for  catalogues,  inserts and flyers where cost and
weight  considerations  are critical.  Repap New Brunswick produces a variety of
grades and weights of lightweight coated groundwood paper on two machines at its
Miramichi,  New Brunswick mill site. Repap New Brunswick's  shipments  represent
approximately 9% of North American coated groundwood paper capacity.

Pulp 
The Repap New Brunswick  operations  include two pulp mills: a fully  integrated
groundwood pulp mill with an annual capacity of 123,000 metric tons; and a Kraft
pulp mill with an annual  capacity of 235,000  metric tons of northern  bleached
softwood Kraft pulp. All of the groundwood pulp and approximately  two-thirds of
Kraft  pulp is used in  Repap  New  Brunswick's  coated  paper  operations.  The
remaining approximately one-third of the Kraft pulp mill's production is sold to
the market, primarily to customers in North America.


                                        8

<PAGE>



Lumber
Repap New Brunswick's  lumber operation consists of two sawmills with a combined
annual  capacity of 58 Mmfbm of  dimension  lumber.  On-site  kilns  provide the
capacity to dry 50% of lumber  production.  The two  sawmills  also provide wood
chips for the Repap New Brunswick Kraft pulp mill.

Markets
Repap's  products  are sold  primarily  in the United  States and Canada  with a
relatively  small  volume of coated  paper and pulp sold in  off-shore  markets.
Sales of coated  paper in the United  States are made  through  Repap  Marketing
Inc., a wholly owned subsidiary.  Sales in Canada are made directly by Repap New
Brunswick and off-shore sales are made by international  agents.  Pulp sales are
made by ECT under a five  year  pulp  agency  agreement.  Lumber  sales are made
either directly or through brokers.

Competition
Repap  competes in North America with North  American and European  coated paper
producers.  Approximately  8-10% of the North American coated  groundwood  paper
market is  supplied by  European  producers.  Repap,  the  fifth-largest  coated
groundwood  paper producer in North America,  has  approximately 9% of the North
American  coated  groundwood  paper  capacity.  Significant  competitors  of the
Corporation with similar or greater capacity in coated  groundwood paper include
Consolidated Papers,  Inc., Champion  International  Corporation,  International
Paper Co.,  Mead  Corporation,  UPM  Kymmene and  Bowater  Incorporated.  Coated
groundwood  paper  also  competes  with  other  grades  of paper  such as coated
freesheet and supercalendered  paper.  Price,  quality and service are important
competitive considerations.

Repap's pulp and lumber products are global  commodities.  Pricing and the level
of shipments are influenced by the supply and demand for those products which in
turn is influenced by inventory levels, exchange rates and economic conditions.

(d) Customers
    ---------

During  1998,  Repap  sold  approximately  107,000  tons of  lightweight  coated
groundwood paper to WWF Paper  Corporation  representing in excess of 20% of the
Corporation's  consolidated revenues. WWF Paper Corporation is a privately owned
North American paper  distributor in which the Corporation has a preferred share
investment.


                                        9

<PAGE>




(e) Raw Materials
    -------------

Approximately  44% of the wood supply for the Repap New Brunswick  operations is
obtained from Crown timber allocations licensed by the Province of New Brunswick
to Repap under the "Lower Miramichi Licence" and the "Upper Miramichi  Licence".
The  remaining  wood  is  acquired  from  third  parties  under  various  supply
agreements or harvested from land owned by Repap New Brunswick.

Repap New Brunswick has approximately 300,000 hectares under the Lower Miramichi
Licence and  approximately  400,000  hectares under the Upper Miramichi  Licence
representing  a combined  allowable  annual cut  ("AAC")  of 1.2  million  cubic
metres.  The lands  cover areas in the  northeastern  part of New  Brunswick  in
proximity  to the pulp  mills.  The species mix  available  from these  licences
consists primarily of spruce and balsam fir.

These forest  licences were granted by the Province of New Brunswick for 25-year
terms and are governed by forest management  agreements which provide that every
five years, in order for such agreements to remain in effect,  Repap is required
to submit for approval a renewed  five-year  plan for management of the licensed
tenures. Repap New Brunswick's forest licences expire in 2017, however, in 1997,
Repap New Brunswick  submitted a forest management plan for the five-year period
ending in 2002 and for a new 25-year  period ending in 2022.  This plan has been
approved and,  subject to the Repap New  Brunswick  completing  some  additional
silviculture  on its Crown Timber  License area,  will be  incorporated  into an
amended and restated forest management agreement for a term ending in 2022.

Additional  wood  requirements  are met by purchases of wood from local wood lot
suppliers and of chips from local  sawmills.  Repap New  Brunswick  also obtains
wood from its own freehold  acreage  aggregating  approximately  17,000 hectares
representing an AAC of 35,000 cubic metres.

(f) Human Resources
    ---------------

Repap has  approximately  1,650  employees  as at March 29,  1999.  At Repap New
Brunswick,  approximately  1,340  unionized  employees are  represented by three
labour  organizations,   namely:  International  Woodworkers  of  America-Canada
("IWA");  Communications,  Energy and Paperworkers of Canada ("CEP"); and United
Brotherhood  of  Carpenters  and  Joiners  of America  "(UBJC").  Five CEP Local
contracts involving approximately 1,110 employees and one UBJC contract covering
approximately 80 employees expired in 1998 and will be renegotiated in 1999. The
IWA contract which covers 26 employees at the Miramichi  sawmill expires May 31,
1999.  One CEP  contract  covering 64  employees  was  renegotiated  in 1997 and
expires April 30, 2000.


                                       10

<PAGE>



(g) Research and Development
    ------------------------

Repap Technologies Inc., a wholly owned subsidiary of the Corporation,  provided
technical assistance to Repap's coated paper and pulp mills through its research
facilities in Valley Forge, Pennsylvania.  This function was moved to Miramichi,
New Brunswick as of January 1999 and is now performed by Repap New Brunswick. As
of April 1, 1999,  Repap  Technologies  Inc. will be merged into Repap Marketing
Inc., a wholly owned subsidiary of the Corporation.

(h) Environment 
    -----------

Repap is subject to  environmental  laws,  regulations and standards by Canadian
federal,  provincial and local  authorities  which impose  effluent and emission
standards and other  requirements  of the Company's  operations.  These laws and
regulations  require  Repap to obtain  permits  and  licences  from  appropriate
governmental  authorities  with  respect to its mill and to operate  its mill in
compliance  with such  permits  and  licences.  Repap  believes  it  operates in
material compliance with all applicable environmental laws and regulations.

Repap New Brunswick has begun a program to eliminate  substantially  the release
of foul condensate  containing total reduced sulphur compounds.  This program is
expected  to be  completed  in 1999 at an  approximate  cost of $9  million.  In
addition,  Repap New  Brunswick  is in the  process of  replacing  its  existing
landfill  site at an  approximate  cost of $5.4  million.  The new  facility  is
expected to be completed in the third  quarter of 1999.  An  application  by Eel
Ground  Native  Band before the Court of Queen's  Bench for the  Province of New
Brunswick for an interim  injunction  seeking to prevent the  development of the
new landfill site was unsuccessful. The Eel Ground Native Band has indicated its
intention to proceed to trial although no dates have been set.

(i) Executive Officers of the Registrant
    ------------------------------------

The Corporation's executive officers and significant employees are as listed
below:

Name                          Age                Principal Occupation
                              ---                --------------------          
F. STEVEN BERG                63                 Chairman and Senior Executive
                                                 Officer

STEPHEN C. LARSON             50                 President and Chief Executive
                                                 Officer

MICHELLE A. CORMIER           42                 Vice-President, Finance


NEIL M. FALCO                 50                 President, Repap Marketing Inc.

TERRY W. McBRIDE              56                 Vice-President and Secretary



                                       11

<PAGE>



During the past five years, the above individuals have held those positions with
the  companies  indicated  opposite  their  names,  except as follows:  prior to
January 27, 1999,  Mr. Berg  served,  and  continues  to serve,  as president of
Bishopsgate  Financial Corp. and as a member of Mahoney & Berg; from August 1991
to October 1994, Mr. Larson served as President - Pulp and Paper Group of Domtar
Inc.,  between  October 1994 and March 1, 1996 he served as President  and Chief
Operating Officer of Domtar Inc. and from March 1, 1996 to August 1997 he served
as President and Chief Operating Officer of the Corporation; prior to October 1,
1997, Mr. Falco served as President of Repap Sales Corporation,  a subsidiary of
Repap that was sold as part of the transaction with  Consolidated  Papers,  Inc.
completed in 1997; from January 1993 to May 1994, Ms. Cormier served as Manager,
Finance  of the  Corporation,  from  May 1994 to  January  1996  she  served  as
Assistant Vice  President,  Finance of the  Corporation and from January 1996 to
August 1997 she served as Vice President, Finance-Operations of the Corporation.

Item 2. Properties.

The Repap New Brunswick  operations  consist of the Repap New  Brunswick  coated
paper mill,  the Repap New  Brunswick  Kraft pulp mill,  the Repap New Brunswick
groundwood  pulp  mill and the  Miramichi  sawmill  (all  which are  located  in
Miramichi,  New  Brunswick)  and the  Blackville  sawmill  (which is  located 45
kilometers west of Miramichi, New Brunswick).

(i)    The Repap New  Brunswick  Coated  Paper Mill  includes  two coated  paper
machines.  The A-1 machine,  built in 1985/86,  has a design capacity of 240,000
tons per year and produces lightweight coated groundwood paper. The A-2 machine,
built in  1989,  has a design  capacity  of  252,000  tons and  produces  coated
groundwood paper.

(ii)   The Repap New Brunswick  Kraft Pulp Mill,  acquired by Repap in 1985, has
an  annual  design  capacity  of  235,000  metric  tons of NBSK  pulp,  of which
approximately  two-thirds are used in Repap New  Brunswick's  Coated Paper Mill,
with the balance sold as market pulp.

(iii)  The  Repap  New  Brunswick   Groundwood   Pulp  Mill  manufactures  stone
groundwood  pulp,  with a capacity of 123,000  metric tons per year.  All of the
available  groundwood  pulp produced by the Repap New Brunswick  groundwood pulp
mill is used in the coated paper operations.

(iv)   The Miramichi  sawmill (formerly the Nelson sawmill) produces stud lumber
for the North  American  market  and has an  annual  capacity  of 10 Mmfbm.  The
Blackville  sawmill produces  dimension lumber for the North American market and
has a capacity of 48 Mmfbm.

Item 3. Legal Proceedings.

There are no material legal  proceedings and there are no proceedings  under any
environmental  protection  laws,  which are  pending  or,  to the  Corporation's
knowledge, threatened, against Repap.


                                       12

<PAGE>




Item 4. Submission of Matters to a Vote of Security Holders.

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of fiscal 1998.


                                       13

<PAGE>




                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

As of March 29,  1999,  there were 1789 holders of record of Common  shares,  of
which 1211 were  shareholders  of record  with  addresses  in the United  States
holding approximately 48% of the outstanding common shares in the capital of the
Corporation.  There is no established public market for the Common shares in the
United  States.  The Common shares of the  Corporation  are listed and traded in
Canada on the Montreal  Exchange and The Toronto Stock  Exchange.  The following
tables  show the high and low prices and volume of trading of the Common  shares
on The Toronto Stock Exchange which is the principal trading market in Canada:


                              TSE
                              ---

                             High             Low               Volume
                             ----             ---               ------          
1997
----
First Quarter              $  4.20          $  1.45           35,637,612
Second Quarter                1.73             0.50           38,812,144
Third Quarter                 0.72             0.16          172,461,712
Fourth Quarter                0.28             0.10          192,330,631

1998
----
First Quarter              $  0.29          $  0.165         103,435,266
Second Quarter                0.395            0.22           89,244,547
Third Quarter                 0.27             0.12           17,839,240
Fourth Quarter                0.15             0.08          135,616,225


On March 29, 1999 the closing  price of the Common  shares on The Toronto  Stock
Exchange was $0.10.

The  Corporation  has paid no dividends to holders of Common  shares in the past
five years. The Corporation  currently intends to retain any earnings for use in
its  business  and  does  not  anticipate  paying  any  cash  dividends  in  the
foreseeable future.

The following  summary of certain tax  provisions is applicable to the purchase,
ownership  and  disposition  of Common  shares by  United  States  corporations,
citizens and resident alien  individuals that are residents of the United States
for purposes of the United States-Canada income tax treaty (the "Treaty") ("U.S.
Persons") and is based on the assumption  that a holder of Common shares is, for
Canadian tax purposes,  neither a resident of Canada nor carrying on business in
Canada and does not own 10% or more of the voting stock of the Corporation. This
summary does not deal with all aspects of United  States  federal  taxation that
may be relevant to particular investors.


                                       14

<PAGE>



Dividends paid to U.S. Persons on Common shares will be subject to Canadian
non-resident withholding tax at the Treaty-reduced rate of 15%. For United
States federal income tax purposes, a U.S. Person generally will include in
gross income the gross amount of any dividends paid before reduction for
Canadian withholding taxes by the Corporation out of its current and accumulated
earnings and profits (as determined for United States federal income tax
purposes), as ordinary income upon the U.S. Person's receipt of distributions on
the Common shares. The amount of a dividend distribution includible in income of
a U. S. Person will be the U.S. dollar value of the Canadian payments made,
determined at the spot Canadian dollar/U.S. dollar rate on the date such
dividend distribution is received by the U.S. Person, regardless of whether the
payment is in fact converted into U.S. dollars. Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date
the dividend payment is includible in income to the date such payment is
converted into U.S. dollars will be treated as ordinary income or loss. Such
gain or loss will generally be income from sources within the United States for
foreign tax credit limitation purposes. The Canadian tax withheld may be
credited, subject to certain limitations, against the U.S. Person's United
States federal income tax liability, or, alternatively, may be deducted in
computing the U.S. Person's United States federal taxable income. For foreign
tax credit purposes, the dividend will be income from sources without the United
States, but generally will be treated separately, together with other items of
"passive income" (or, in the case of certain holders, "financial services
income"). Dividends paid on the Common shares will not be eligible for the
dividends-received deduction available in certain cases to United States
corporations.

Under the Treaty, a U.S. Person generally will not be subject to Canadian income
tax in respect of any capital gains realized on the disposition of Common
shares.

For United States federal income tax purposes, upon a sale or exchange of Common
shares, a U.S. Person will recognize gain or loss equal to the difference
between the U.S. dollar value of the amount realized on such sale or exchange
and the holder's tax basis in such Common shares (determined in U.S. dollars).
Generally any such gain or loss will be a capital gain or loss if the Common
shares are held as capital assets and will be long-term capital gain or loss if
the U.S. Person's holding period for the Common shares is greater than one (1)
year.

This summary is of a general nature only and is not intended to be, and should
not be interpreted as, legal or tax advice to any particular holder of Common
shares.

Item 6. Selected Financial Data.

A summary of selected historical financial data is set forth on page 30 of the
1998 Annual Report of the Corporation and is incorporated herein by reference.



                                       15

<PAGE>



Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

The management's  discussion and analysis of financial  condition and results of
operations is set forth on pages 6 to 12 of the Corporation's 1998 Annual Report
and is incorporated herein by reference.

As described in note 1 to the Notes to  Consolidated  Financial  Statements  set
forth on page 18 of the Corporation's 1998 Annual Report,  which is incorporated
herein by reference, the Corporation's ability to continue as a going concern is
dependent  upon its ability to refinance  the revolving  credit  facility at its
maturity,  to achieve  profitable  operations and to generate positive cash flow
from continuing operations. While the Corporation did achieve positive cash flow
from  operations  during 1998,  its ability to do so  throughout  1999 cannot be
determined with certainty at this time. The Corporation's  financial  statements
do not include any adjustments to the amounts and  classifications of assets and
liabilities that might be necessary should the Corporation be unable to continue
its business.

As  further  described  under  note 22 to the  Notes to  Consolidated  Financial
Statements set forth on pages 26 to 28 of the  Corporation's  1998 Annual Report
(attached hereto as Appendix A and filed herewith as an exhibit) which pages are
incorporated  herein by  reference,  the  accounting  policies  followed  by the
Corporation  differ in certain respects from those that would have been followed
had these  financial  statements  been  prepared in conformity  with  accounting
principles generally accepted in the United States and the accounting principles
and practices required by the United States Securities and Exchange Commission.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Quantitative  and qualitative  information on the material market risks to which
the Corporation is exposed is set forth on pages 10 and 11 of the  Corporation's
Annual  Report  under the  heading  "Risks  and  Uncertainties"  and in Note 23,
"Financial  Instruments" to the Consolidated  Financial  Statements set forth on
pages 28 and 29 of the  Corporation's  Annual Report of the  Corporation,  which
Annual Report is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

The Auditors  Report,  Consolidated  Balance  Sheets,  Statements of Operations,
Statements of Changes in Financial  Position and Deficit,  Notes to Consolidated
Financial Statements and Quarterly Financial  Information  appearing on pages 13
to 30 of the 1998 Annual Report of the  Corporation are  incorporated  herein by
reference.

Item  9.  Changes  in and  disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

None.


                                       16

<PAGE>




                                    PART III

Item 10. Directors and Executive Officers of the Registrant.

Information regarding the Corporation's directors is incorporated herein by
reference to the material under the heading "Nominees for Election as Director"
in the Corporation's Proxy Circular with respect to the 1999 Annual Meeting of
Shareholders(the "Proxy Circular") which will be filed pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended.

Information regarding the Corporation's executive officers is provided under the
heading "Executive Officers of the Registrant" in Part I of this report.

Item 11. Executive Compensation.

Information regarding executive compensation is incorporated herein by reference
to the material under the heading "Compensation of Directors and Executive
Officers" in the Proxy Circular.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

Information regarding the share ownership of Repap's voting securities (1) of
any person or group known to the Corporation to be the beneficial owner of more
than five per cent of Repap's voting securities and (2) of the directors and the
named executive officers is incorporated herein by reference to the material
under the heading "Voting Shares and Principal Holders Thereof" in the Proxy
Circular.

Item 13. Certain Relationships and Related Transactions.

Information regarding certain transactions between the Corporation and certain
executive officers of the Corporation is incorporated herein by reference to the
material under the heading "Indebtedness of Directors and Executive Officers"
and "Interest of Management and others in Material Transactions" in the Proxy
Circular.



                                       17

<PAGE>



                                     PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(a) The following documents are filed as part of this Report on Form 10-K:

(1) The following documents are included at the indicated page in the
    Corporation's 1998 Annual Report and are incorporated herein by reference:


                                                                       Page(s)
Report of auditors                                                        13
Consolidated Balance Sheets                                             14-15
Consolidated Statements of Operations                                     16
Consolidated Statements of Changes in Financial Position                  17
Consolidated Statements of Deficit                                        16
Notes to Consolidated Financial Statements                              18-29

(2) Financial Statement Schedules

Schedule 1 -    Condensed Financial Information of Registrant

(3) Exhibit Index (numbered in accordance with Item 601 of Regulation S-K)

2.1      Stock Purchase Agreement between the Corporation and Tolko Industries
         Ltd. dated as of July 18, 1997 which has been filed as an exhibit to
         the Annual Report on Form 10-K of the Corporation for the fiscal year
         ended December 31, 1997 (the "1997 Form 10-K") and is incorporated
         herein by reference.

2.2      Stock Purchase Agreement between the Corporation and Consolidated
         Papers, Inc. dated as of August 8, 1997 which has been filed as an
         exhibit to the 1997 Form 10-K and is incorporated herein by reference.

3.1      Certificate of Amendment and Articles of Amendment of the Corporation
         dated July 8, 1994, which certificate and articles of amendment were
         filed as an exhibit to the Annual Report on Form 20-F of the
         Corporation for the fiscal year ended December 31, 1994 (the "1994 Form
         20-F") and are incorporated herein by reference.

3.1.1*   Certificate of Amendment and Articles of Amendment of the Corporation
         dated June 17, 1998 and June 5, 1998, respectively.

3.2      By-law 1986-1 of the Corporation dated September 22, 1986; By-law
         1986-2 of the Corporation dated October 14, 1986; and By-law 1987-1 of
         the Corporation


                                       18

<PAGE>



         dated May 11, 1988 which By-laws were filed as an exhibit to the 1997
         Form 10-K and is incorporated herein by reference.

4.1      Indenture, dated as of April 15, 1995, between Repap New Brunswick and
         The Bank of New York, as trustee, relating to the 9 7/8% First Priority
         Fixed Rate Senior Secured Notes Due 2000 of Repap New Brunswick, which
         indenture was filed as an exhibit to the Annual Report on Form 20-F of
         Repap New Brunswick for the fiscal year ended December 31, 1994 (the
         "1994 RNB Form 20-F") and is incorporated herein by reference.

4.2      First Supplemental Indenture, dated as of June 1, 1998 between Repap
         New Brunswick and the Bank of New York, as trustee, relating to the 9
         7/8% First Priority Fixed Rate Senior Secured Notes Due 2000 of Repap
         New Brunswick, which supplemental indenture was files as an exhibit to
         the Annual Report on Form 20-F of Repap New Brunswick for the fiscal
         year ended December 31, 1997 (the "1997 RNB Form 20-F") and is hereby
         incorporated by reference.

4.3      Indenture, dated as of April 15, 1995, between Repap New Brunswick and
         Bankers Trust Company, as trustee, relating to the 10 5/8% Second
         Priority Senior Secured Notes due 2005 of Repap New Brunswick, which
         indenture was filed as an exhibit to the 1994 RNB Form 20-F and is
         incorporated herein by reference.

4.4      First Supplemental Indenture, dated as of June 1, 1998, between Repap
         New Brunswick and the Bankers Trust Company, as trustee, relating to
         the 10 5/8% Second Priority Fixed Rate Senior Secured Notes Due 2005 of
         Repap New Brunswick, which supplemental indenture was filed as an
         exhibit to the 1997 RNB Form 20-F and is hereby incorporated by
         reference.

4.5      Credit Agreement, dated as of June 4, 1998, between Repap New Brunswick
         Inc. and Credit Suisse First Boston, as Administrative Agent, relating
         to the First Priority Floating Rate Loans due June 1,2004 of Repap New
         Brunswick Inc which has been filed as an exhibit to the registration
         statement on Form F-4 (Registration No. 333-9210) of Repap New
         Brunswick filed with the SEC on July 31, 1998 (the "1998 RNB F-4") and
         is hereby incorporated by reference.

4.6(1)   Trust Indenture, dated as of May 15, 1998, between the Corporation and
         Montreal Trust Company, as trustee, relating to the 6% Convertible
         Subordinated Debentures due 2005 of the Corporation.

4.7      Collateral Agency and Intercreditor Agreement, dated April 15, 1995,
         among Repap New Brunswick, The Bank of New York and Bankers Trust
         Company and an Undertaking thereto, dated June 4, 1998, by each of The
         Bank of New


                                       19

<PAGE>



         York and Credit Suisse First Boston, which has been filed as an exhibit
         to the 1998 RNB F-4 and is hereby incorporated by reference.

4.8      Debenture, dated April 24, 1995, by and between Repap New Brunswick and
         The Bank of New York, which has been filed as an exhibit to the 1998
         RNB Form F-4 and is hereby incorporated by reference.

4.9      Debenture Amending Agreement, dated June 1, 1998, between Repap New
         Brunswick and The Bank of New York, which has been filed as an exhibit
         to the 1998 RNB F-4 and is hereby incorporated by reference.

4.10     Debenture Amending Agreement, dated as of October 26, 1998, between
         Repap New Brunswick, The Bank of New York and Credit Suisse First
         Boston, which has been filed as an exhibit to the 1998 RNB F-4 and is
         hereby incorporated by reference.

4.11*    Debenture, dated April 24, 1994, by and between Repap New Brunswick,
         The Bank of New York and Bankers Trust Company.

4.12*    Debenture Amending Agreement, dated as of October 26, 1998, between
         Repap New Brunswick, The Bank of New York and Bankers Trust Company.

4.13     Indenture, dated as of June 1, 1998, between Repap New Brunswick Inc.
         and The Bank of New York, as trustee, relating to the 9% First Priority
         Fixed Rate Senior Secured Notes due 2004 of Repap New Brunswick Inc
         which has been filed as an exhibit to the 1998 RNB F-4 and is hereby
         incorporated by reference.

10.1     Amended and Restated Forest Management License dated April 1, 1992
         between Her Majesty the Queen in right of the Province of New Brunswick
         and Miramichi Pulp & Paper Inc. which has been filed as an exhibit to
         the 1997 Form 10-K and is incorporated herein by reference.

10.2     Amended and Restated Forest Management License dated April 1, 1992
         between Her Majesty the Queen in right of the Province of New Brunswick
         and Miramichi Pulp & Paper Inc. which has been filed as an exhibit to
         the 1997 Form 10-K and is incorporated herein by reference.

10.3     Employment contract between the Corporation and Stephen C. Larson dated
         as of September 25, 1997 which has been filed as an exhibit to the 1997
         Form 10- K and is incorporated herein by reference.

10.3.1*  Amendment to employment agreement between the Corporation and Stephen
         C. Larson dated as of December 15, 1998.



                                       20

<PAGE>



10.4     Change in Control contract between the Corporation and Terry W. McBride
         dated October 1, 1997 which has been filed as an exhibit to the 1997
         Form 10- K and is incorporated herein by reference.

10.4.1*  Amendment to change in control contract between the Corporation and
         Terry W. McBride dated as of December 15, 1998.

10.5     Change in Control contract between the Corporation and Michelle A.
         Cormier dated October 1, 1997 which has been filed as an exhibit to the
         1997 Form 10- K and is incorporated herein by reference.

10.5.1*  Amendment to change in control contract between the Corporation and
         Michelle A. Cormier dated as of December 15, 1998.

10.6     Change in Control contract between Repap Enterprises Inc. and Neil M.
         Falco dated October 1, 1997 which has been filed as an exhibit to the
         1997 Form 10- K and is incorporated herein by reference.

10.7     The Corporation's Registered Pension Plan and Amendment No. 1 which has
         been filed as an exhibit to the 1997 Form 10-K and is incorporated
         herein by reference.

10.7.1*  The Corporation's Registered Pension Plan Amendment No, 2.

10.8     The Corporation's Supplemental Registered Pension Plan which has been
         filed as an exhibit to the 1997 Form 10-K and is incorporated herein by
         reference.

10.9     The Corporation's Top Executive Registered Pension Plan which has been
         filed as an exhibit to the 1997 Form 10-K and is incorporated herein by
         reference.

10.10    The Corporation's 1987 Directors, Officers and Employees Stock Option
         Plan, as amended which has been filed as an exhibit to the 1997 Form
         10-K and is incorporated herein by reference.

10.11*   The Corporation's 1991 Employee Stock Option Plan, as amended.

10.12*   Employment contract between the Corporation and F. Steven Berg dated as
         of January 27, 1999.

10.13*   Stock Option Grant Agreement between the Corporation and F. Steven Berg
         dated as of March 23, 1999.

11.1*    Statement regarding computation of per share earnings.

13.1*    The Corporation's Annual Report to Shareholders (except for those
         portions thereof which are expressly incorporated by reference herein,
         this exhibit is furnished for the information of the Commission and is
         not deemed to be filed as a part hereof).

21.1*    Subsidiaries of Repap Enterprises Inc.


                                       21

<PAGE>



23.1*    Consent of Ernst & Young.

27.1*    Financial Data Schedule

*        Filed herewith.

(1) Instruments, other than as set forth above, have been omitted with respect
to long-term debt of the Registrant and its subsidiaries which authorized
securities having a face value not exceeding 10% of the total assets of the
Registrant and its subsidiaries on a consolidated basis. The Registrant hereby
agrees to furnish a copy of those instruments on request.



                                       22

<PAGE>



(b) Reports on Form 8-K

       None


                                       23

<PAGE>


                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
                                             REPAP ENTERPRISES INC.

                                             By:   "Stephen C. Larson"
                                                   -------------------          
                                                   STEPHEN C. LARSON
                                                   PRESIDENT AND CHIEF EXECUTIVE
                                                   OFFICER

Date:  March  31, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated, on March 31, 1999.

         SIGNATURE                                          TITLE


"F. Steven Berg"                             Director, Chairman and
----------------                             Senior Executive Officer
F. Steven Berg



                                             Director
-----------------
Marshall A. Cohen



                                             Director
-----------------
Pierre Fitzgibbon



"Stephen C. Larson"                          Director, President and
-------------------                          Chief Executive Officer
Stephen C. Larson



"Stephen W. Phillips"                        Director
---------------------
Stephen W. Phillips



"Clifford M. Sifton"                         Director
--------------------
Clifford M. Sifton



"Michelle A. Cormier"                        Vice President, Finance
---------------------
Michelle A. Cormier



                                       24