Catalyst Files for Bankruptcy Protection
Catalyst Paper Corporation of Richmond, BC, today filed for bankruptcy protection under the Companies' Creditors Arrangement Act (CCAA), in the Supreme Court of British Columbia.
The CCAA filing indicates that the company plans to restructure, but the company states the terms and conditions of the plan have not yet been determined. Catalyst management will remain responsible for the day-to-day operations of the company.
"Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks," commented Catalyst President and CEO, Kevin J. Clarke, in a written statement about the filing. "Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined.
"After reviewing this matter carefully with our Board of Directors and advisors, we have elected to begin the CCAA proceeding," continued Clarke. "The Board, management and our advisors believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment."
According to its statement, Catalyst previously announced a consensual recapitalization transaction under the Canada Business Corporations Act (CBCA), based on varying support of its senior-note holders.
Catalyst manufactures specialty printing papers, newsprint and pulp, with four mills located in British Columbia and Arizona. The company has a combined annual production capacity of 1.9-million tonnes.
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