Tag Archives: Fibrek

Resolute Forest Products Inc. and Fibrek Inc. have completed their previously announced second step plan of arrangement transaction, whereby Fibrek and RFP Acquisition Inc., a wholly-owned subsidiary of Resolute, have amalgamated resulting in Resolute indirectly owning 100% of the shares of Fibrek Inc.

This announcement comes following the approval of the arrangement by Fibrek’s shareholders on July 23, 2012 and the issuance of a final order of the Superior Court of Quebec on July 27, 2012 approving the arrangement.

Fibrek has applied for its common shares to be delisted from the Toronto Stock Exchange and expects such delisting to be effective as of the close of markets on August 2, 2012.

In addition, Fibrek has applied and made the required filings with the relevant Canadian securities regulatory authorities in order for Fibrek to cease to be a reporting issuer or the equivalent in the relevant Canadian provinces and territories.

Registered Fibrek shareholders who have not yet sent letters of transmittal accompanied by original Fibrek share certificates to the depositary for the arrangement, Canadian Stock Transfer Company Inc., acting in its capacity as administrative agent of CIBC Mellon Trust Company, are reminded that they should do so promptly in order to receive payment under the terms stipulated in the circular addressed to Fibrek shareholders dated June 22, 2012.

Source: Resolute Forest Products

Fibrek Inc. is temporarily shutting down its market pulp mill in Saint-Félicien starting on July 29, 2012 in order to carry out repairs on the electrostatic precipitator.

The shutdown is expected to last about one week.

This measure has been taken to avoid excessive particulate emissions into the atmosphere and attests to the commitment of Fibrek’s new management to improve the company’s environmental performance.

“We will spare no effort to ensure that Fibrek’s operations achieve the same environmental performance as those of Resolute Forest Products” said Richard Garneau, President and Chief Executive Officer of Fibrek and Resolute Forest Products Inc.

Source: Fibrek

Fibrek Inc. has announced that it will be idling the Saint-Félicien mill for 12 days of market-related downtime to help control inventory.

The downtime will begin on June 23.

The measure will impact production by approximately 12,000 tonnes of northern bleached softwood kraft pulp (NBSK). The Saint-Félicien mill’s annual capacity is approximately 375,000 tonnes.

Source: Fibrek

Resolute Forest Products Inc.  and Fibrek Inc. have announced that Fibrek has entered into an agreement with RFP Acquisition Inc., a wholly-owned subsidiary of Resolute, for a proposed arrangement to amalgamate and form a new corporation, wholly-owned by Resolute.

The Arrangement constitutes the second step transaction for Resolute to acquire all the Fibrek shares not deposited in the take-over bid it launched on December 15, 2011, which expired on May 17. Resolute holds approximately 74.56% of the outstanding Fibrek shares.

Under the terms of the Arrangement, holders of Fibrek common shares, other than RFP Acquisition Inc., will be given the same choices of per share consideration previously offered in the take-over bid, namely:

• C$0.55 in cash and 0.0284 of a Resolute share; or
• C$1.00 in cash (subject to proration, as described in the circular); or
• 0.0632 of a Resolute share (subject to proration, as described in the circular)

The maximum amount of cash consideration available under the Arrangement is approximately C$18.2 million and the maximum number of shares of Resolute common stock available to be issued is approximately 940,000.

Under the terms of the Arrangement, Fibrek and RFP Acquisition have agreed to apply for an interim order of the Superior Court of Quebec to convene a special meeting of Fibrek’s shareholders to vote on the proposed Arrangement. The independent members of Fibrek’s board have received an opinion from their financial advisor, Sanabe & Associates, LLC, that the consideration payable to Fibrek shareholders in the Arrangement is fair, from a financial point of view, to the shareholders of Fibrek (other than RFP Acquisition). Based on their own analysis and various other factors, including the fairness opinion, the independent members of Fibrek’s board unanimously approved the transaction and have recommended that shareholders vote in favor of the Arrangement.

The special meeting is expected to be scheduled for July 23, 2012, with a June 20 record date. Fibrek’s motion for the interim order is expected to be heard on June 20. Resolute, through RFP Acquisition, is committed in the arrangement agreement to vote all of its Fibrek shares, representing approximately 74.56% of the outstanding shares, in favor of the Arrangement.

Subject to the interim order, full details of the transaction will be included in a management information circular, which is expected to be filed by Fibrek with the Canadian securities regulatory authorities and mailed to Fibrek shareholders in the week of June 25. The circular will also contain full details on the terms of the proposed plan of arrangement, the factors considered by Fibrek’s independent directors as well as a summary and complete copy of Sanabe & Associates’ fairness opinion.

Source: Resolute Forest Products

Back in December 2011, the Fibrek‘s Board of Directors amended the employment agreements of their executive employment agreements to include a “change of control” clause that would come into effect if:

• another entity acquires all or substantially all the assets of Fibrek, or
• another entity becomes the beneficial owner of more than 50% of the Common Shares, or
• 50% or more of the members of the board of directors of Fibrek becoming persons other than the Existing Directors

If any of the executives would be terminated without cause or suffer a substantial change in his or her working conditions within six months of a change of control, or, give notice of his or her intention to voluntarily terminate his or her own employment within 60 days of the change of control, such executive was entitled to a separation payment.

These changes were made with the objective of incentivizing and retaining the services of the Fibrek executives in the context of the Resolute Offer.

On May 2, 2012 the change of control clause was triggered when Resolute Forest Products acquired Fibrek.

On May 9, 2012, the 5 executives at Fibrek resigned from their positions and were therefore eligible for separation payments.

Before they left, the departing executives approved their separation payments and secured the payments in a trust account in April.  In addition, a letter of credit was put in place in April 2011, the amount of which was increased in December 2011, to secure the additional pension benefits recognized to Pierre Gabriel Côté in the event of a change of control.

Pierre Gabriel Côté -  President and Chief Executive Officer - $5,114,684

As President and CEO,  Côté received a severance payment equal to 36 months of his base salary, and a target short-term bonus.

$5,114,684 was paid to Côté on May 11, 2012.

Of this payment, $3,634,934 was his severance payment and $1,479,750 was to settle his supplemental pension benefits accrued during his employment.

Without the change of control clause, Côté’s severance payment would have been $900,000.

Patsie Ducharme - Vice President and Chief Financial Officer - $754,866

Ducharme received a severance payment equal to 24 months of salary, a short-term bonus, and the value of contributions and notional supplementary contributions that would have been made by Fibrek to the Pension Plan for Ducharme during such 24-month period.

Ducharme’s payment was $754,866.

Ducharme will keep her medical, dental and life insurance coverage for 24 months.

Without the change of control clause, Ducharme’s severance payment would have been $531,144.

Dany Paradis - Vice President, Change Management and Supply Chain - $914,157

Paradis received a severance payment equal to 24 months of his base salary and target short-term bonus, and the value of contributions and notional supplementary contributions that would have been made by Fibrek to the Pension Plan for  Paradis during such 24-month period.

Paradis’s payment was $914,157 .

Paradis will also keep his medical, dental and life insurance coverage for 24 months.

Without the change of control clause, Paradis’ severance payment would have been $417,101.

Jean-Pierre Benoit - Vice President, Sales and Operations - $778,497

Benoit  received a severance payment equal to 24 months of his base salary and target short-term bonus, and the value of contributions and notional supplementary contributions that would have been made by Fibrek to the Pension Plan for Benoit during such 24-month period.

Benoit’s payment was $778,497.

Benoit will also keep his medical, dental and life insurance coverage for 24 months.

Without the change of control clause, Benoit’s severance payment would have been $363,544.

Emmanuelle Lamarre-Cliche, Vice President, Legal Affairs, Sustainable Development and Corporate Secretary – $671,931

Emmanuelle Lamarre-Cliche received a severance payment equal to 24 months of her base salary and target short-term bonus, and the value of contributions and notional supplementary contributions that would have been made by Fibrek to the Pension Plan for Lamarre-Cliche during such 24-month period.

Lamarre-Cliche’s payment was $671,931.

Lamarre-Cliche will also keep her medical, dental and life insurance coverage for 24 months.

Without the change of control clause, Lamarre-Cliche’s severance payment would have been $318,994.

Resolute Forest Products now owns 74.56% of Fibrek. Resolute’s offer for Fibrek closed at 5pm today.

As aggregate consideration for the shares taken up today, Resolute will distribute approximately 135,000 newly-issued shares of its common stock and CAD$2.6 million in cash through RFP Acquisition Inc., a wholly-owned subsidiary.

Resolute is planning to carry out a second step transaction to acquire the Fibrek shares not deposited in the offer.  The second step transaction will first have to be approved by Fibrek’s shareholders.

Source: Resolute Forest Products

Fibrek Inc. has posted a net loss of $23.2 million in its first quarter of 2012, compared with net earnings of $3.5 million in the corresponding period of 2011.

Consolidated sales reached $122.1 million, a decrease of $10.0 million when compared with sales of $132.1 million in the first quarter of 2011. This reduction is mainly attributable to lower pulp prices and an unfavourable sales mix for $20.4 million, which was partially offset by a higher sales volume for $8.5 million and a favourable exchange rate for $1.9 million.

Since September 30, 2011, Fibrek has had an increased need for liquidity given (i) the recent costs related to efforts expended by Fibrek to seek out value maximizing alternatives to the Abitibi Insider Bid, (ii) the high level of RBK pulp inventories and lower than anticipated sales which have resulted in a market-related shutdown of the Fairmont Mill, (iii) capital expenditures required in connection with Fibrek’s power generation initiatives in Saint-Félicien, and (iv) costs associated with growth and diversification opportunities, such as the interrupted tissue company acquisition.

Cash flows from operating activities for the first quarter of 2012 totalled $16.3 million, compared with cash flows from operating activities of $6.4 million for the corresponding quarter of 2011. The increase in cash flows from operating activites is due to the reduction in non-cash working capital, partly offset by lower operating results. The positive variation of $36.7 million in operating working capital is primarily due to a reduction in accounts receivables and inventories, mainly finished goods, partly offset by a decrease in accounts payable.

On May 4, 2012, AbitibiBowater announced that it had taken up and accepted for payment 12,305,679 additional shares of Fibrek, bringing Abitibi’s holdings to 63.3%. AbitibiBowater also extended its Insider Bid to 5:00 p.m. (Eastern Time) on May 17, 2012.

Fibrek is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Québec, Fairmont, West Virginia, and in Menominee, Michigan with a combined annual production capacity of 760,000 tonnes. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp (product known as NBSK pulp) to various sectors of the paper industry mainly in Canada, the United States and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp (product known as RBK pulp) and primarily supply manufacturers of fine uncoated paper, household paper for commercial and industrial uses, and coated paper in the United States.

Read full release from Fibrek

Fibrek Inc. has announced that following the acquisition of 63.3% of Fibrek by Resolute Forest Products, each of the members of the board of directors has resigned.

The new members of the Board nominated by Resolute are Jacques P. Vachon, Jo-Ann Longworth, Michel Desbiens, Michel Gagnon, Daniel Filion, and Richard Garneau who will serve as Chairman of the Board.

Fibrek also announced that the following members of Fibrek’s management team have resigned from their positions as corporate officers of the Company, effective immediately, but will ensure an orderly transition to the new management team until May 31, 2012:

• Pierre Gabriel Côté, President and Chief Executive Officer;
• Patsie Ducharme, Vice President and Chief Financial Officer;
• Emmanuelle Lamarre-Cliche, Vice President, Legal Affairs, Sustainable Development and Corporate Secretary;
• Jean-Pierre Benoit, Vice President, Sales and Operations;
• Dany Paradis, Vice President, Change Management and Supply Chain.

The incoming Board of Directors has named a new management team, which includes:

• Richard Garneau, President and Chief Executive Officer;
• Alain Boivin, Vice President, Operations;
• Jo-Ann Longworth, Vice President and Chief Financial Officer;
• Jacques P. Vachon, Vice President, Legal Affairs and Corporate Secretary.

In addition to the above, it was also announced that Investissement Québec has agreed today to amend the change of control provision contained in the term loan such that the change of a majority of the Board of Fibrek by nominees designated by Resolute shall not constitute a change of control of Fibrek (as such term is defined in the term loan) up until the earlier of i) the date of the next annual or special meeting of Fibrek; or ii) June 29, 2012.

Source: Fibrek

Fibrek has concluded an agreement for the sale of green energy produced at its cogeneration facilities located at the Saint-Félicien mill in connection with Hydro-Québec Distribution’s Power Purchase Program for electricity derived from forest biomass cogeneration (PAE 2011-01), which was launched on December 20, 2011.

The 33.23 MW of green energy currently produced by Fibrek will be sold to Hydro-Québec Distribution beginning on May 5, 2012 at a price of $106 per megawatt per hour, indexed to the consumer price index (CPI) for a 25-year period. The contract will generate approximately $16 million a year in EBITDA.

“This production will further increase the previously announced 9.56 MW that Fibrek will be supplying to the government corporation starting in December 2012. By the end of this year, the Saint-Félicien mill will be producing 42.79 MW in green energy for Hydro-Québec Distribution,” said Fibrek’s CEO Pierre Gabriel Côté.

“Revenue diversification is a key component of our business plan. In addition, increasing our green energy production fits well within our sustainable development plan and reflects our vision when it comes to innovation for growth,” concluded Côté.

Fibrek is investing approximately $37 million in the construction of a new power plant that will be used to produce the additional 9.56 MW. Over the long term, green energy production will ensure the competitive position of the Saint-Félicien NBSK pulp mill despite the challenges facing the pulp and paper industry. The leadership demonstrated by the executive team in obtaining this new contract will consolidate jobs and secure the future of the mill.

Source: Fibrek

AbitibiBowater Inc., doing business as Resolute Forest Products, has taken up and accepted for payment 1,633,800 additional shares of Fibrek Inc. deposited to its offer as of the close of business today.

Together with the shares the company acquired up to and including April 23, Resolute now has majority control of Fibrek, with approximately 50.1% of the currently outstanding shares.

As aggregate consideration for the shares taken up today, Resolute will distribute approximately 46,000 newly-issued shares of its common stock and CAD$900,000 in cash through RFP Acquisition Inc., a wholly-owned subsidiary.

Source: Resolute Forest Products