The much-delayed D-day for Catalyst paper is finally expected to arrive in Richmond Wednesday.
And a representative of the firm that owns Crofton’s pulp mill says those delays will give the firm a fighting chance. The meeting had previously been set for May 18.
Number-crunchers have fine-tuned a financial-restructuring plan in a bid to make it attractive enough to creditors that they will vote to give Catalyst what it needs to survive, Lyn Brown explained last week.
“The amended plan means less debt and better liquidity for the company, which will help get us back to normal trade terms with suppliers,” Brown said.
“The amended plan brings our total debt down by US $435 million, which is $120 million better than in the original plan,” Brown said in an e-mail about Crofton’s beleaguered parent company, which last year paid North Cowichan $5.4 million in taxes.
“This is made up of two parts: we’ll issue US $75 million less in new first-lien notes, and eliminate US $45 million in new first-lien coupon notes, compared to the original plan.”
In addition, she says, Catalyst’s 50-per-cent stake in Powell River Energy Inc. [PREI] will be sold, and up to half of those net proceeds will be available for distribution to unsecured creditors who elect this option.
“Those who choose not to participate in the PREI proceeds pool, or to receive a convenience cash amount to a maximum of $5,000, will have the option to acquire a pro-rata share of up to 600,000 new common shares [four per cent of the total to be issued to holders of first-lien notes],” said Brown.
A court-appointed monitor supports the amended plan, and it goes to a creditor vote on May 23.
“Whatever the outcome of those meetings, we still have a lot of work ahead to be at a point where we can emerge from creditor protection,” Brown said.