JP Morgan is providing Catalyst Paper with up to $175 million in debtor-in possession (DIP) financing to help fund its operations during its period of credit protection, under the Companies’ Creditors Arrangement Act (CCAA).

Advances under the DIP will be available after approval by the Court, which the company expects to obtain on February 3, 2012.

The company’s operating revenue combined with the proposed DIP financing are expected to provide sufficient liquidity to meet ongoing obligations to employees and suppliers and ensure that normal operations continue during the restructuring process.

Catalyst management will remain responsible for the day-to-day operations of the company.

The Supreme Court of British Columbia granted protection yesterday under the CCAA for an initial period expiring on February 14, 2012 to be extended as required and approved by the Court.

While the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors are stayed.

The CCAA filing applies to:

• Catalyst
• Catalyst Paper General Partnership
• Catalyst Pulp Operations Limited
• Catalyst Pulp Sales Inc.
• Pacifica Poplars Ltd.
• Catalyst Pulp and Paper Sales Inc.
• Elk Falls Pulp and Paper Limited
• Catalyst Paper Energy Holdings Inc.
• 0606890 B.C. Ltd.
• Catalyst Paper Recycling Inc.
• Catalyst Paper (Snowflake) Inc.
• Catalyst Paper Holdings Inc.
• Pacifica Papers U.S. Inc.
• Pacifica Poplars Inc.
• Pacifica Papers Sales Inc.
• Catalyst Paper (USA) Inc.
• The Apache Railway Company

Source: Catalyst Paper