Catalyst Paper to sell U.S. mills to Chinese company

Sale will allow company to focus on B.C. interests, says president Ned Dwyer

  • May. 25, 2018 3:22 p.m.

Catalyst Paper is selling its American mills in three cities to a Chinese company for US$175 million, Catalyst announced Friday, May 25.

The Richmond-based company said with the sale it will turn its focus toward its British Columbia-based businesses. Catalyst Paper owns paper mills in Port Alberni, Crofton and Powell River.

Catalyst has entered into a sales and purchase agreement with ND Paper LLC, a wholly owned subsidiary of Nine Dragons Paper Ltd., which trades on the Hong Kong Stock Exchange.

Once the sale is final, ND Paper LLC will acquire Catalyst’s Rumford, Maine and Biron, Wisconsin mills along with associated staff at the company’s U.S. operations centre in Dayton, Ohio, according to a company press release. Catalyst will remain involved during a transition period as a condition of sale.

READ: Fear new U.S. anti-dumping duties could price Catalyst out of business

READ: Province steps up to help Catalyst Paper in war against U.S. duties

Catalyst president and CEO Ned Dwyer said the transaction allows Catalyst to re-pay a significant portion of its debt “and focus on our British Columbia operations.

“We continue to pursue opportunities to improve the competitiveness of our company and our industry,” said Dwyer in a statement. “We also continue to work with the provincial and federal governments in our defence against the unwarranted imposition of U.S. countervailing and anti-dumping duties.”

The sale will have a positive effect on mills such as Port Alberni’s or Crofton’s, Catalyst vice-president of environment, health and safety Graham Kissack said. “In terms of the influence this has on Port Alberni’s mill, it’s actually positive because we’ve generated a substantial portion of cash from the transaction and we’re using that cash to pay down our debt,” Kissack said.

That means B.C.-based mills won’t be carrying as much debt, and Catalyst will be able to lower cost to service debt.

“The decision’s been made for now to pay down the debt,” Kissack added. “It was seen as our best approach forward at this time. We’re putting a great deal of focus in improving competitiveness in all three of our B.C. mills.”

Catalyst purchased the three American mills in July 2015 and put “a very effective team of Catalyst employees” in place to turn them around, he added. The management team “made some pretty substantial changes in those mills”—so much that Catalyst was able to sell them for three times the original purchase price, Kissack said.

The transaction is expected to close by the end of the second quarter upon the favourable vote of Catalyst’s shareholders, with a meeting of shareholders scheduled for June 11, 2018. The company said its three major shareholders, representing 87 percent of the outstanding shares, have agreed to vote in favour of the sale at the June meeting.

editor@albernivalleynews.com

Just Posted

VIDEO: Ladysmith, North Oyster crews knock down brush fire

The quick action of Ladysmith and North Oyster and firefighters from the… Continue reading

Mid-Vancouver Island air quality risk very high

Residents of the mid-Island area went to bed last night and awoke… Continue reading

RCMP looking for missing Duncan teen

Dallas Macleod, 18, was last seen on Aug. 10

‘Beauty amongst such tragedy:’ B.C. photographer captures nature’s trifecta

David Luggi’s photo from a beach in Fraser Lake shows Shovel Lake wildfire, Big Dipper and an aurora

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

Another person stabbed at a tent city on Vancouver Island

Incident happened Friday afternoon in Nanaimo; injuries were not severe

Bear kills off-leash dog in B.C. park

There have been nearly 200 pet or livestock and bear encounters so far this year

Trudeau says he won’t apologize to heckler, pledges to call out ‘hate speech’

Prime Minister had accused woman of racism as she shouted about illegal immigration at Quebec rally

Documentary filmed in B.C. nominated in ‘Wildlife Oscars’’

Toad People is the only Canadian film to be nominated in this year’s Panda Wilderness Awards

B.C. man builds 10-foot sign thanking fire responders

Ken Rawson built his “thank u” sign on Saturday as helicopters responded to fires around the province.

PHOTOS: Olympian Patrick Chan helps B.C.’s ‘SuperChefs’ celebrate 10th anniversary

Former figure skater among those at event Friday in Surrey

Smaller B.C. bus service prepares to replace Greyhound

Kootenay-to-Okanagan run would require online reservations

Mother charged with homicide of Langley seven-year-old

Aaliyah Rosa’s 36-year-old mother charged with second degree murder: IHIT

Most Read