Sale of Fraser Papers’ specialty papers business clears all hurdles (February 26, 2010)
February 26, 2010 By Pulp & Paper Canada
Fraser Papers Inc., the Canadian Energy and Paperworkers Union of Canada, the Government of New Brunswick, and…
Fraser Papers Inc., the Canadian Energy and Paperworkers Union of Canada, the Government of New Brunswick, and other stakeholders, have agreed to the broad terms under which Fraser Papers will proceed to close the sale of its specialty papers business to a company sponsored by the secured creditors of Fraser Papers (Newco). The agreement included proposed changes to the collective agreements at the company’s Edmundston pulp and energy complex which will require ratification on or before March 10, 2010.
The company has filed the agreement with the Ontario Superior Court of Justice, and will work with its secured creditors and Newco to close the sale of the specialty papers business before March 31, 2010.
Under the terms of the purchase agreement, the unsecured creditors of Fraser Papers will receive promissory notes and a 49% common equity interest in the new company. Brookfield Asset Management Inc., a secured creditor, has agreed to convert its secured claim against the company into a 51% common equity interest in Newco while the Government of New Brunswick has agreed to convert its $35 million secured loan plus accrued interest into equity in the form of preferred shares of the new company.
Fraser Papers also announced that the Court has granted a further extension of its creditor protection to April 9.
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