Catalyst Paper — owner of Crofton’s pulp mill — says the company, and certain of its subsidiaries, have gotten an initial creditor-protection order from the B.C. Supreme Court.
The court granted protection under the CCAA for an initial period expiring on Feb. 14. It can be extended as required and approved by the court, Catalyst bosses said in a press release Wednesday.
While the company and its subsidiaries are under CCAA protection, all proceedings by its creditors are stayed. Catalyst keeps control of daily operations at Crofton and its other mills.
Catalyst brass said financial giant J.P. Morgan has agreed to provide debtor-in-possession financing to Catalyst.
J.P. Morgan is expected to provide the company with up to approximately $175 million of available capital during CCAA proceedings.
The court’s initial order gives Catalyst access to cash the company believes is sufficient to fund operations until a court hearing on Feb 3.
The company’s operating revenue, combined with the Morgan financing, should allow the firm to meet its obligations to employees — including Crofton’s 400-some PPWC members, and 100-odd members of the Communications, Energy, and Paperworkers’ union — and suppliers.
Terms of the pulp giant’s restructuring plan under the Companies’ Creditors Arrangement Act, have yet to be determined.
A tentative plan struck outside the courtroom was scuttled during Saturday’s PPWC union vote when workers rejected Catalyst’s five-year contract deal.
Previous restructuring terms by the debt-ridden company, said the firm needed fresh contracts with its five union locals, including Crofton’s Local 2 of the Pulp, Paper, and Woodworkers of Canada, by Jan. 31.