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Friday, May 25, 2012 An attempt at debt restructuring by Catalyst Paper failed by a narrow margin Wednesday, leaving the future of the Ärm and its mill in Crofton uncertain. Catalyst’s CEO says the decision launched a 73-day process, with the property essentially up for sale. Peter W. Rusland/¿le
Crucial Catalyst vote fails, mill could go to bidders Locals worry: Company CEO says it’s business as usual as Catalyst’s future unfolds in 73 days of complex legal processes. Peter W. Rusland
News Leader Pictorial
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rofton mill’s future will be determined during 73 days of complex legal work after Catalyst Paper’s ¿nancial restructuring vote failed Wednesday, CEO Kevin Clarke
explained. He reassured workers and customers it’s business as usual at the ¿rm’s three pulp-and-paper mills as the legal picture unfolds. “Absolutely nothing changes in their lives. The vote was narrowly voted against. We needed
66% of various classes to vote for it,” he said just after balloting by stakeholders in Richmond. “A small group of bondholders voted against the plan.” Failure of the Àoundering ¿rm to get creditor approval for its amended plan of arrangement, under the Companies’ Creditors Arrangement Act, has left Crofton’s union spokesman Paul Zarry, and North Cowichan Councillor Al Siebring, with a wait-and-see approach. “If the mill closes, we’ll deal with it then,” Siebring said Thursday of the mill, which paid the municipality $5.4 million in taxes last year. He declined to comment about more resi-
NG EVENT I R P S O T N I
dential-tax hikes, or spending cuts, as Catalyst struggles with its debts. “I’d rather budget on a what-is basis.” Zarry signalled Crofton’s 380-some members of the Pulp, Paper, and Woodworkers of Canada are worried after Wednesday’s vote failed by just 2.7%. “The anxiety is ‘What’ll happen now?’ “(Members) could have hunkered down with some comfort, but we’re on delay again,” Zarry said of jobs, wages and pensions. Approval of not less than 66.7% of the principal amount of each creditor class voting on the plan was required, Catalyst brass said of the vote. “Although 99.5% of the principal amount of the secured creditor class voted in favour of the plan, only 64% of the principal amount of the unsecured creditor class voted in favour.” Zarry said the PPWC has agreed to a ¿ve-year contract, with a 10% drop in wages and more, to help keep the mill alive. He pegged PPWC concessions at some $36 million that could vanish from local spending. “It’s like Àoating down a river on a log, and you’re not sure what side of the falls you’re on.” Catalyst now enters what’s called a SISP, or Sales and Investor Solicitation Procedures.
2012 CIVIC SEDAN DX
“Basically, we’ve put the “It’s like Àoating company up for sale — it’s very complex,” Clarke down a river on said. Complexities include a a log, and you’re $275-million “stalkingnot sure what horse bid” for Catalyst’s mills and assets at Crofton, side of the falls Port Alberni and Powell you’re on.” River. The stalking horse is an initial bid chosen by Catalyst and designed to set the bar for takeover. “They’re hedge funds and large investment companies interested in companies like ours.” But Clarke was con¿dent in a de¿ned legal process to take Catalyst’s customers, workers and pensioners forward. “We’ll robustly communicate with stakeholders so we don’t have the rumour mill. “I’m extraordinarily proud of people at Catalyst for everything they’ve done in the past six months.” Pensioners, he said, will be given every option available. “We want to treat them as respectfully and fairly as we can within the process.”
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