Catalyst Paper still seeking a plan to appease creditors
By Pulp & Paper Canada
By Pulp & Paper Canada
B.C. papermaker Catalyst Paper still attempting to craft a restructuring plan that will please both secured and unsecured creditors as the process to sell its assets continues. The company was forced to begin the court-mandated sales process…
B.C. papermaker Catalyst Paper still attempting to craft a restructuring plan that will please both secured and unsecured creditors as the process to sell its assets continues. The company was forced to begin the court-mandated sales process when unsecured creditors would not support a previous plan of arrangement.
The amended plan has been presented to certain secured and unsecured creditors. It contains changes in the area of health benefits and pensions.
“We continue to receive and consider input from various parties on further amendments to the plan in an effort to secure a consensual deal that improves our financial structure and that addresses the interests of creditors, our workforce, pensioners and community leaders. In the meantime, the sales and investor solicitation process is proceeding so that regardless of which restructuring pathway is ultimately agreed to, Catalyst can emerge from creditor protection in an effective and timely manner,” said president and CEO Kevin J. Clarke.
The proposed changes to the plan of arrangement include the compromise of certain extended health benefits plans for former salaried employees of Catalyst that were not to be compromised under the prior plan of arrangement. Catalyst has been advised that there is substantial support for the Amended Plan by the holders of the extended health benefits claims that would be compromised under the Amended Plan. In addition, certain holders of Unsecured Notes who previously voted against the plan of arrangement or did not vote on the plan of arrangement have indicated that they would support the Amended Plan.
The company has also proposed modifications to its salaried pension plan to provide for a special portability election option and solvency funding relief which require provincial government approval. The Minister of Finance has confirmed that he is prepared to submit the proposal to Cabinet for its consideration with a recommendation in favour. The company estimates that it would save approximately $7 million annually if these modifications were implemented following a successful plan of arrangement.
Catalyst Paper had earlier announced that a number of parties have expressed interest in participating in the sale and investor solicitation procedures. Potential bidders proceeding to the next stage of the sale process must submit a non-binding indication of interest by July 11.