Catalyst asks for second chance to restructure debt
Catalyst Paper has another set of cards up its sleeve that could save the company from selling its assets.
The owner of the Crofton Pulp and Paper Mill has been up for sale since creditors and noteholders rejected a debt restructuring plan in a vote held May 23. The company is now proposing to amend the plan of arrangement, which calls for compromising extended health benefits for former salaried employees.
According to a June 12 press release, Catalyst said there is “substantial support for the Amended Plan by the holders of the extended health benefits claims.”
Catalyst CEO and President Kevin Clarke said the company is discussing the options with various parties to “secure a consensual deal that improves our financial structure.”
Part of the amended plan also includes changes to salaried pension plans.
The provincial government’s mediator on the Catalyst file, Vancouver-Quelchena MLA and a former finance minister, Colin Hansen, said the Pension Standards Act allows the Cabinet to give the company more time to fill the funding gap in the pension plans.
“There is power in there whereby the provincial Cabinet can approve restructuring proposals, so that’s what’s come forward with the support of both the pension groups and that’s what we’re working on.”
Hansen insists several groups involved in the creditor protection process want to give the company another chance to restructure its $840 million debt load.
“Hopefully there’s going to be an opportunity for a revote. I think that would be everybody’s best possible outcome.”
Ultimately, the court will decide whether the amended plan of arrangement can be put to another vote.
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