Fraser Papers Inc. has received court approval to sell its paper and lumber mill assets by auction with a mini…
Fraser Papers Inc. has received court approval to sell its paper and lumber mill assets by auction with a minimum bid set by Brookfield Asset Management Inc. Fraser Papers has been in bankruptcy protection since June. The auction is open to higher and better bids, but Reuters reports that a $2 million termination fee is payable to Brookfield if a bid from another party is accepted.
Bloomberg News reports that Brookfield agreed to swap its debt for a 51% stake in a new company that will buy Fraser’s paper mills in Edmundston, New Brunswick, and Madawaska, Maine, as well lumber mills in Plaster Rock, New Brunswick, and Juniper, New Brunswick, for about C$65 million ($62 million).
According to Bloomberg.com, Ontario Superior Court Judge Sarah Pepall approved the sale to Brookfield in principle at the request of Fraser Papers, which said the endorsement was needed to assure suppliers and customers the company will keep operating. She said final approval will be required after the auction ends in February.
The company is putting “the cart before the horse,” by seeking sale approval before the auction and before labor contracts and pensions are negotiated with its unions, Michael Church, a lawyer for the Communications, Energy & Paperworkers union told the judge today at a hearing in Toronto.
Fraser plans to find a compromise with the unions before asking the judge to approve a plan to exit bankruptcy, the company’s lawyer, Robert Thornton, said.
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