Catalyst Paper to restructure
Catalyst Paper Corporation has obtained an Initial Order from the Supreme Court of British Columbia under the Companies’ Creditors Arrangement Act (CCAA). The terms and conditions of the restructuring plan have not yet been determined by the company.
The company also said that JP Morgan has agreed to provide debtor-in possession (DIP) financing to Catalyst, which is expected to provide the company with up to approximately $175 million of available capital during the CCAA proceedings. Advances under the DIP will be available after approval by the Court. The Initial Order provides the company with access to an amount the company believes is sufficient to fund operations until the Court hearing.
The company’s operating revenue combined with the proposed DIP financing are expected to provide sufficient liquidity to meet ongoing obligations to employees and suppliers and ensure that normal operations continue during the restructuring process. Catalyst management will remain responsible for the day-to-day operations of the company.
The company intends to apply for recognition of the Interim Order under chapter 15 of title 11 of the US Code.
The Court granted protection under the CCAA for an initial period which expired on February 14, 2012 to be extended as required and approved by the Court. While the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors are stayed.
The CCAA filing applies to Catalyst, Catalyst Paper General Partnership, Catalyst Pulp Operations Limited, Catalyst Pulp Sales Inc., Pacifica Poplars Ltd., Catalyst Pulp and Paper Sales Inc., Elk Falls Pulp and Paper Limited, Catalyst Paper Energy Holdings Inc., 0606890 B.C. Ltd., Catalyst Paper Recycling Inc., Catalyst Paper (Snowflake) Inc., Catalyst Paper Holdings Inc., Pacifica Papers U.S. Inc., Pacifica Poplars Inc., Pacifica Papers Sales Inc., Catalyst Paper (USA) Inc. and The Apache Railway Company.