Catalyst Paper has agreed to sell its approximately 50% interest in Powell River Energy Inc. and Powell River Energy Limited Partnership, but will continue to receive energy from the company to power its Powell River mill.
Catalyst Paper’s interest will be sold, subject to court approval, to Powell River Energy Trust, a Brookfield Renewable Energy affiliate, for $33 million. Powell River Energy Trust currently holds the other 50% stake in the Powell River Energy joint venture originally established in 2001.
“Sale of this energy asset to our joint venture partner enables a smooth operational transition, maintains reliable electricity supply for our Powell River paper mill under a power purchase agreement and ensures we meet the terms of the plan of arrangement in a timely way," said president and CEO Kevin J. Clarke.
All electricity generated by Powell River Energy will be sold to Catalyst under a power purchase agreement which expires in 2016 with possible extension to 2021 at Catalyst's discretion.
Pursuant to its plan of arrangement under the Companies' Creditors Arrangement Act, Catalyst is required to sell its stake in Powell River Energy and to distribute a share of the proceeds to certain unsecured creditors of Catalyst.
Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp at three mills located in British Columbia.