Pope & Talbot Sale Delayed
April 1, 2008 By Pulp & Paper Canada
There is speculation that the purchase of the Pope & Talbot sawmill in Fort St. James, BC, and related timberland a…
There is speculation that the purchase of the Pope & Talbot sawmill in Fort St. James, BC, and related timberland and three pulp mills (two in BC, one in Oregon) has gone sideways. However, Pope & Talbot spokesman Mark Rossolo told The Vancouver Sun newspaper that the deal has simply been delayed from April 4 until April 30, due to technical reasons and paperwork.
In early February, Asia Pulp & Paper (APP), subsidiary of Pindo Deli Pulp & Paper Mills, was the sole bidder at the BC Supreme Court-ordered sale of the assets. Since then, events have changed for APP.
The relaxation of tropical-hardwood harvesting in Indonesia lessens APP’s need for additional Canadian fibre and a major premise behind the deal which was an offer of $230-million.
The U.S. government also hit APP with a judgment to recover $100 million in defaulted loans; should the Pope & Talbot deal go through, it could result in a lien being placed against the APP’s new U.S. asset, the aforementioned Oregon pulp mill (book value $50 million).
Meanwhile, tightening credit markets in North America is making it much harder to finance large deals, especially for companies such as APP that defaulted on billions of dollars in loans in 2001.
Speculation or not, the parties involved in the deal say that everything is on track and the deal will close at months end.
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