Neenah to transfer Terrace Bay
August 10, 2006 By Pulp & Paper Canada
Neenah Paper has signed an agreement to transfer its Terrace Bay pulp mill and woodlands assets over to Terrace Bay…
Neenah Paper has signed an agreement to transfer its Terrace Bay pulp mill and woodlands assets over to Terrace Bay Pulp and Eagle Logging, members of the Buchanan group.
Although the deal remains subject to closing agreements, once it’s finished Terrace Bay Pulp will take over the Terrace Bay operations. This includes existing employee and other contracts, as well as other assets and reliabilities directly related to the operation.
Assets of the company’s woodlands operations will be transferred to Eagle Logging.
Neenah Paper will pay roughly $18 million and retain certain working capital amounts. Additionally, in accordance with the agreement, Neenah Paper will set in motion plans to settle its Ontario defined benefit pension plan. Costs associated with this settlement are estimated to be in the ballpark of $18 million.
“This agreement represents a win for all parties, including Neenah Paper’s shareholders, the workforce at Terrace Bay and their communities, and also Buchanan Forest Products,” said Sean Erwin, chairman and CEO. “It allows the mill to continue operating and cash requirements are substantially lower than if we had proceeded to close the mill. Neenah Paper is now in a position of added financial flexibility and strength and can focus on growing our core paper business.”
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