The approval of Terrace Bay Pulp's repayment plan moves the idled Ontario pulp mill one step closer to resuming production this summer. According to the Chronicle Journal newspaper, 165 of 168 voted in favour of the plan, which represents $35 million in claims.
The paper also reports that the company has reached a separate agreement with about two dozen logging contractors who are collectively owed about $9 million for logs and wood chips delivered before the mill was idled in February 2009.
The mill, located in Terrace Bay on the north shore of Lake Superior, has been under creditor protection since March 2009. A sanction hearing set for July 13 in Ontario‘s Superior Court is expected to set the stage for recalling mill workers and restarting the mill.
Yves Fricot, a lawyer for Terrace Bay Pulp's owners Buchanan Forest Products, said barring any further obstacles, the plant could be making product by the end of July.
Though an unnamed private lender willing to loan the operation $40 million pulled out on June 10, Fricot told the Chronicle Journal that an agreement with another lender is very close to being finalized.
The company had earlier secured an additional $25-million loan from the Ontario government on the condition that it secure its own financing.
Thunder Bay-based Buchanan Group took over Terrace Bay Pulp in the fall of 2006 from Georgia-based Neenah Paper.