Fortress Paper Ltd. has been granted a deferral on its upcoming principal payment under its $102.4 million project financing loan with Investissement Quebec relating to its Fortress Specialty Cellulose Mill.
The company received, without penalty, a deferral of approximately $4.3 million in principal repayment which was payable in the second quarter of 2014. This principal payment deferral is in addition to the previously disclosed deferral of approximately $5.3 million in principal and interest payments which were payable during the first quarter of 2014 under the IQ loan.
“The recent principal payment deferral enhances the financial flexibility of Fortress Paper and is reflective of our positive ongoing partnership with Investissement Quebec (IQ) during this transitory period in the dissolving pulp industry,” explained Chadwick Wasilenkoff, CEO of Fortress Paper. “This interim measure is greatly appreciated while we continue to work towards a more meaningful and long-term structure that would further enhance the company's financial flexibility."
Mr. Wasilenkoff further added, “We feel current market conditions in dissolving pulp are not sustainable and not reflective of the medium to long-term growth in demand. We feel the flexibility provided by IQ together with the progress we have made in stabilizing our Security Papers division should provide Fortress Paper a firm base to build towards an improved outlook for 2014."
Fortress Paper operates internationally in two distinct business segments: dissolving pulp and security paper products. The Company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill located in Thurso, Que., which has expanded into the renewable energy generation sector with the construction of a cogeneration facility and the production of NBHK pulp.