Catalyst Paper Announces Successful Completion of Reorganization
RICHMOND, BC—Sept. 13, 2012—Catalyst Paper has successfully completed its previously announced reorganization pursuant to its Second Amended and Restated Plan of Compromise and Arrangement (the Amended Plan) under the Companies’ Creditors Arrangement Act.
As a result of the reorganization and related transactions, the company has reduced its debt by $390 million, eliminated $80 million of accrued interest and reduced annual interest expense and other cash costs by approximately $70 million.
“We entered the reorganization process with a clear objective to put Catalyst on stronger financial footing and we have done so,” said Kevin J. Clarke, president and CEO. “Many parties worked long and hard to resolve balance sheet and cashflow issues constructively and quickly throughout the process. I am very proud of our employees who stayed focused throughout this challenging period. Sales kept our order book strong, operations ran well and, going forward, we intend to capitalize on the momentum generated to compete even more vigorously in the markets for our products.”
The Amended Plan was overwhelmingly approved at meetings of the company’s secured and unsecured creditors on June 25, 2012 and was approved by the Supreme Court of British Columbia on June 28, 2012.
As part of the reorganization, the company has also entered into the previously announced new asset backed loan (ABL) facility and exit financing facility. Approximately US$35 million was drawn under the exit facility upon the implementation of the Amended Plan.
The company’s new board of directors as of Sept. 13, 2012, is comprised of John Brecker, Giorgio Caputo, John Charles, Kevin J. Clarke, Todd Dillabough, Walter Jones and Leslie Lederer.
“As we emerge from creditor protection, I want to acknowledge our former board chairman Jeffrey Marshall and directors Thomas Chambers, William Dickson, Douglas Hayhurst, Alan Miller, Geoffrey Plant and Dallas Ross for their service to Catalyst Paper,” said Clarke.
Speaking on behalf of the former board, Chairman Jeffrey Marshall commended, “the dedication, contributions and unwavering support of Catalyst’s employees and management team, unions, customers, suppliers, retirees, and pensioners, as well as the support of the communities where its mills and other facilities are located. Without this commitment, coupled with the intensive and unyielding efforts of the company’s legal advisory team of Blake, Cassels & Graydon LLP; Skadden, Arps, Slate, Meagher & Flom LLP; Lawson Lundell LLP; and the financial advisory team of Perella Weinberg Partners, this result would not have been achieved.”
Marshall further noted, “the court-appointed Monitor, PricewaterhouseCoopers, also played a vital role in the achievement of this well-balanced result.”
Additional information regarding the Amended Plan and the company is contained on the Monitor’s website.
Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.8 million tonnes. Capacity will be 1.5 million tonnes upon closure of the mill in Snowflake, AZ effective September 30, 2012. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.