By: Cowichan Valley Citizen
The Supreme Court of BC gave the green light on Jan. 18 to major changes to the way Catalyst Paper does business.
Catalyst Paper, which owns the Crofton pulp mill, is in the process of a recapitalization plan that would see the forest company switch from a publicly traded entity to a private enterprise.
Company spokeswoman Eduarda Hodgins said the completion of the recapitalization plan is subject to the customary closing conditions, but if it proceeds, it’s “good news” for the company’s mills and workers.
“If this deal is finalized, it will reduce our debt, increase our liquidity and allow Catalyst to grow and thrive,” she said.
“It’s a fairly complex process and we’re fairly confident that it will proceed, but the deal is not closed yet. If it passes, it will allow us to conduct business as usual, but with more financial flexibility.”
Catalyst’s shareholders and noteholders have already approved the recapitalization plan by more than 90 per cent.
The recapitalization process began in October after a deal to sell Catalyst, which has approximately 600 workers at the Crofton mill alone, to the Indian-based Kejriwal Group International fell through.
At the time, the four principal stakeholders in Catalyst, who own 79 per cent of the B.C.-based company, announced they were looking at other alternatives.
The stakeholders — Mudrick Capital Management LP, Cyrus Capital Partners LP, Oaktree Capital Management LP, and Stonehill Management LLC — said they were considering significant debt reductions through deferrals and conversion of its loans that would provide the forest company with enhanced liquidity.
It’s expected that if the plan goes through, Catalyst’s common shares will be delisted from the Toronto Stock Exchange.
The final closing of the deal is expected later this month.
As well as the mill in Crofton, Catalyst owns pulp and paper mills in Port Alberni and Powell River, as well as two mills in the U.S. at Biron, Wisconsin, and Rumford, Maine.
The major products from the Crofton mill include newsprint, directory paper and kraft pulp which is used to manufacture printing, writing and tissue paper.