Catalyst Paper has obtained creditor protection under the Companies' Creditor Arrangement Act (CCAA) after failing to reach a deal with a union at its Crofton mill by the Jan. 31 deadline stipulated in the company's voluntary restructuring plan.
The company has said it will continue operations as usual and that it will meet obligations to suppliers and employees during the restructuring process.
Documents filed by Catalyst indicate the company has $810 million of debt, but the value of the company is estimated by its financial officer to be considerably less, maybe only half that amount.
JP Morgan has agreed to provide debtor-in possession (DIP) financing to Catalyst, which is expected to provide the company with up to approximately $175 million of available capital during the CCAA proceedings.
The company has pulp and paper mills at Crofton, Port Alberni, and Powell River in B.C., and a recycled paper mill in Arizona.
Catalyst had reached agreement with five of six union locals representing its Canadian mills, but members of the Pulp, Paper and Woodworkers of Canada local at Crofton would not accept the proposed agreement.