Insolvent forestry company gets court approval for sale; seeks takeover proposals.
RICHMOND, BC: Catalyst Paper Corp. has published notice that it has received court approval for its sale and is asking for proposals from prospective buyers.
The insolvent forestry company, based in Richmond, BC, says Thursday it has postings in two major North American newspapers asking for proposals to acquire the assets and business or to invest in the company.
It is asking interested parties to make their intentions known by June 6.
The insolvent forestry company says its amended plan of arrangement under the Companies’ Creditors Arrangement Act failed to gain approval from 66.6% of the principal amount of each creditor class.
A stalking horse bid process will allow the company to choose an interested buyer to make an initial bid, enabling it to avoid low bids on its assets. Once the first or “stalking horse” bid is made, other buyers can submit competing offers for its assets.
The company was delisted from the Toronto Stock exchange in March.
Catalyst Paper has been going through a restructuring process under court protection from creditors. It has secured up to $175 million in debtor-in-possession financing from JP Morgan during the CCAA process.
The CCAA filing came after Catalyst failed to win support from enough of its lenders and from unionized workers at a mill in Crofton, BC, who rejected contract concessions.
The company also filed for Chapter 15 court protection in the US, a form that foreign companies operating in the US employ when seeking protection from creditors.
Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp and sells to retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe.
The company has three mills in BC and one in Arizona with a combined annual production capacity of 1.9 million tonnes.
©The Canadian Press