Catalyst Paper to file for creditor protection
January 31st, 2012 | Posted in Financial News | 11 comments »
Catalyst Paper Corporation has announced that to facilitate an orderly restructuring of its business and operations, the board of directors of the company has approved a filing for an Initial Order from the Supreme Court of British Columbia to commence proceedings under the Companies’ Creditors Arrangement Act (CCAA).
The terms and conditions of the restructuring plan have not yet been determined by the company.
The operations of Catalyst and its subsidiaries are intended to continue as usual and obligations to employees and suppliers during the restructuring process are expected to be met in the ordinary course. Catalyst management will remain responsible for the day-to-day operations of the company. The company expects that the Interim Order will provide that while the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors will be stayed.
The company previously announced a consensual recapitalization transaction under the Canada Business Corporations Act (CBCA) that had the support of certain of the holders of the company’s 11% senior secured notes due 2016 and 7 3/8% senior notes due 2014 who were parties to a Restructuring and Support Agreement (Agreement). The Agreement provided that, among other conditions, the recapitalization transaction was subject to the following two conditions being met by January 31, 2012: (a) a new labour agreement ratified by all six union locals at the company’s BC mills and (b) two-thirds support of all 2014 and 2016 noteholders. Since these conditions will not be met, the company will not be proceeding with a recapitalization under the CBCA.
“Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks,” said Catalyst President and Chief Executive Officer, Kevin J. Clarke. “Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined. After reviewing this matter carefully with our Board of Directors and advisors, we have elected to begin the CCAA proceeding,” he said. “The Board, management and our advisors believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment.”
Catalyst manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Index® and is also ranked by Corporate Knights as one of the 50 Best Corporate Citizens in Canada.
Source: Catalyst Paper
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11 Responses to Catalyst Paper to file for creditor protection
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This really makes last weeks “clarification” , look stupid. Do they know what they are doing? I suspect it was stalling so the upper execs can line their golden parachute.
Yes a very sad day indeed especially for the CEP locals that had the cerebral ability to understand the seriousness of the situation. Now they will face deep cuts (20 – 25%) as they come out of CCAA. Another group affected are the retirees some of whom accepted company bridging as part of an early retirement package. Not only will all retirees now lose their medical and prescription benefits but the the group with the bridge will lose the same benefits along with slashing their pension by 1/3rd. This in most cases equates to $1100.00 a month to age 65 then it drops to $600.00 for life. Due to pension penalties of 18% for going at 55 and another 15% penalty for accepting an incentive, these retirees will be living off $1000.00 to $1800.00.
So congratulations to the 180 PPWC members who voted NO – you sure showed them! You can all hold your collective heads high knowing that your irresponsible actions have had a profound negative effect on the Company, fellow employees and potentially has spiralled retirees into poverty.
I am wondering if you would be referring to the same “poor retirees” that are still working amongst us as “temps”?.Not only do they get bridging as well as their pension they also collect a paycheque for working back amongst us.I would think they are making a lot more $$$$$$ than you have implied!!!!
No, although I understand that some tradesmen are double dipping…I’m referring to non-trades. Not much demand for old papermakers, warehouse workers etc. – I’m also concerned about the older retirees (and their widows) who have health problems and who are now being faced with a potential suspension of their health benefits…there are plenty of victims in this debacle.
I think in recent years our members in both unions were given very nice incentives to retire and the ones who weren’t are mostly safely past the bridged years. Also what difference does it make if you sign an agreement that cuts your new hires pay by half almost. Betrayal is the same no matter if it’s old or young. Im hoping that our stand will not cause pain to either age group as the other unions will most defiantly injure the new hires.
Hey Popereel …I see from the time of your post you don’t live here.. Thank god for that cause I don’t like wimps or dumb asses. Did you happen to notice that they didn’t get the support of the bond holders also. So it wasn’t just us. Now as we only voted once on the seal and took our brother union three times to get what you think is right its clear that’s it not a slam dunk. Insulting people who at great personal peril who choose to stand for their rights and not fold with out a punch being thrown is pretty lame. I just hope that you were never a union man as you have no heart and probably have lived a life hiding in the shadows scared to confront anything. I wish you not well….. Ps I was not a no but respect a vote result that unlike the other union was done once and fairly.
Oops sorry I was a yes. Not a no .. I was a yes. Reason…if they are telling the truth and we could lose the mill I retire to the tropical breezes..A lot of my friends would end up in our frozen north. My heart and my hate of bullies wanted to vote no but my fear for what could happen to my workmates forced me to vote yes. I still believe they are lying and there will be more and better offers but I’m not willing to gambles others future on a hunch. Now as we have rejected it I’m good with the fight.
Don’t know where this time clocks but it’s wrong..only eleven here.
Hey Popereel, if you took you head out of ass once in a while you would know that this deal didnt get the support of the bondholders either. Glad I dont work in your mill, you would be bending over at the first hint of trouble.
Well I agree with you that Popereel is uniformed but let’s try to be civil as we are in the end all union workers I think and it does no good to blame , attack, or insult each other,,let’s save our hatred for the Company and the Bitch party who sit in Victoria.
In olden days , someone like Popereel would have been tared and feathered , and paraded through town. What a gutless wonder.