Tag Archives: fibrek

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

Mercer International Inc.‘s offer for all of the common shares of Fibrek Inc. expired on April 27, 2012.

The Offer was conditioned upon, among other things, at least 50.1% of the outstanding Fibrek Shares, on a fully-diluted basis, having been tendered thereunder, which was not met as of the Expiry Time. Accordingly, Mercer and MERC Acquisition Inc. will not acquire any Fibrek Shares that were tendered under the Offer.

The Support Agreement between Mercer and Fibrek dated February 9, 2012, as amended, has been terminated. All Fibrek Shares that were previously tendered under the Offer and not withdrawn will be returned promptly.

Source: Mercer International Inc.

AbitibiBowater, doing business as Resolute Forest Products, has yet to secure a majority of Fibrek‘s shares.

Resolute Forest Products currently holds about 48.8% of Fibrek’s shares.

Fibrek criticized its rival’s lack of success in convincing those other than large shareholders to tender their shares.
“After extending its bid for the eighth time now, Abitibi has once again made little to no progress convincing Fibrek minority shareholders…to tender to their inferior bid.”

For Resolute to successfully privatize Fibrek at $1.00 per share, an affirmative vote of a minimum of 66 2/3% of all Fibrek shareholders is required.

Read more:
Resolute Announces Take-Up of Additional Fibrek Shares and Extension of Offer to May 4 (Resolute Forest Products)
Abitibi still unable to convince Fibrek minority shareholders to tender to their inferior bid (Fibrek)
Fibrek not surrendering as Resolute controls 48.8 per cent of shares (The Canadian Press)
Fibrek not surrendering as Resolute controls 48.8 per cent of shares (Canadian Business)

According to AbitibiBowater, doing business as Resolute Forest Products, the Supreme Court of Canada has refused to hear an appeal by Fibrek Inc. and Mercer International Inc. of the Québec Court of Appeal’s decision concerning Fibrek’s special warrants.

Accordingly, the order issued by the Bureau de décision et de révision (Québec) on February 23 is now final and non-appealable, and Fibrek’s dilutive private placement of 32,320,000 special warrants to Mercer is definitively cease traded.

On April 11, Resolute acquired 60,831,859 Fibrek shares, representing approximately 46.8% of those currently outstanding, and announced that it had extended the expiry time for its offer in order to allow additional Fibrek shareholders to participate. The offer currently expires at 5:00 p.m. (Eastern time) on April 23, 2012.

Source: Resolute Forest Products

Mercer International Inc. has increased its offer for Fibrek and is now offering to purchase all of the issued and outstanding common shares of Fibrek for $1.30 (up from $1.40).

The increased consideration represents a 40% premium over the unsolicited insider bid made by AbitibiBowater Inc. (doing business as Resolute Forest Products).

Fibrek also announced today that its Board of Directors has adopted a shareholder rights plan, to automatically terminate at the close of business on May 11, 2012, in order to enable shareholders to benefit from the Increased Mercer Offer.

“Mercer has once again brought a superior offer to the table – one which recognizes the intrinsic value of Fibrek shares, as confirmed by the independent valuation presented to the Board in February, and one the Board strongly recommends to shareholders,” stated Hubert T. Lacroix, Chairman of the Board of Directors of Fibrek. “Note that the full amount of the increased portion of Mercer’s improved offer at $1.40 is payable in additional cash.

“Our Board remains committed to its fiduciary duty to maximize value for our shareholders. Faced with Abitibi’s continued oppressive conduct, which has effectively prevented an unrestricted auction for the common shares of Fibrek, we are taking measures to promote shareholder democracy in the face of a highly coercive unsolicited bid by Abitibi. The adoption of the shareholder rights plan is a genuine attempt by the Board to provide our shareholders with the ability to choose Mercer’s vastly superior offer.

“The rights plan, which will expire on May 11, will provide shareholders with sufficient time to compare Mercer’s new, improved offer to Abitibi’s inferior bid and will eliminate the threat of Abitibi’s coercive offer against our minority shareholders who may feel forced into tendering their shares in fear of being left out in a controlled public company, without any hope of getting a control premium for their shares. In addition, the rights plan will give enough time to the minority shareholders to wait for the Supreme Court decision. We have fought vigorously to protect the rights of our shareholders since day one and we will continue to do so,” continued Mr. Lacroix.

In Fibrek’s news release this morning, they took the opportunity to remind their shareholders of the following developments since the Mercer offer was originally announced on February 10, 2012:

• the troubling behaviour of Abitibi and its insiders Fairfax Financial Holdings Limited and Steelhead Partners, LLC, including the significant and improper acquisitions of Fibrek shares made by Steelhead after the announcement of the Abitibi offer;
• the reduction by Abitibi of its minimum tender condition to the number of shares covered by lock-up agreements in its favour, which could allow Abitibi to become, practically speaking, the controlling shareholder of Fibrek as soon as its offer expires at 11:59 p.m. today, without having paid a fair value to our shareholders;
• Abitibi has no obligation to extend its offer following April 11 and therefore no obligation to acquire more common shares or to privatize the Company after having taken up only 59,502,822 of the 130,075,556 Fibrek shares currently outstanding;
• Abitibi’s opportunistic strategy to acquire Fibrek shares at a discount while proceedings seeking a cease trade order in respect of its offer are still pending takes advantage of the uncertainty existing in the market; and
• Abitibi’s coercive attempt to place Fibrek shareholders in front of a fait accompli and force them to accept its inadequate offer and leave $0.40 per share on the table.

Pierre Gabriel Côté, President and Chief Executive Officer of Fibrek, added: “In adopting the new shareholder rights plan, the Board is ensuring that shareholders can choose an increased offer from Mercer. We are very pleased that the new offer now recognizes further value in Fibrek to the benefit of our shareholders, including our potential 33 megawatt power purchase agreement which could generate an incremental EBITDA of up to $16 million.”

Read more from Fibrek

Fibrek Inc.  has announced that the Supreme Court of Canada has granted Fibrek’s request to expedite the application for permission to appeal the Québec Court of Appeal’s decision to maintain the cease trade order of the proposed private placement of 32,320,000 special warrants to purchase common shares of Fibrek to Mercer International Inc.

The Supreme Court has established that any responses to the application for leave shall be served and filed by 4 p.m.on April 12, 2012 and Fibrek will have until noon on April 13, 2012 to serve and file its reply.

In the event permission to appeal is granted, the decision to expedite the appeal will be decided by the panel of judges on the application for leave to appeal.

Source: Fibrek