Cowichan mill workers, pensioners and local leaders are sweating bullets about an April 23 vote that could decide the future of Catalyst Crofton’s pulp-and-paper mill.
That’s the day Catalyst’s note holders and creditors vote on a proposed restructuring and support plan that could see the pulp giant — employing some 700 union workers, plus salaried staffers, in Crofton — continuing to operate.
Stakeholders will also cast ballots on a proposed sales and investor solicitation process order, if restructuring plans for the financially troubled firm fail to pass.
The complex process sees the sales and investor process contain a minimum bid — called a stalking-horse bid agreement — whereby some note holders assemble a company to buy Catalyst’s assets if restructuring fails, explained the Catalyst-Timberwest Retired Salaried Employees Association.
Association member and retired Catalyst accountant Don Swiatlowski, 63, feared his pension will be slashed by more than 30 per cent if restructuring flops. He figures pensions and benefits of some 1,500 non-union Catalyst retirees could be hit.
Catalyst’s Lyn Brown tried to salve Swiatlowski’s fears.
“A successful restructuring is in the best interest of everyone,” she said. “We’re doing everything we can to come forward with a solution to mitigate any downside risk to retirees, and to continue to address any shortfall over the long term.”
Paul Zarry of Crofton’s 400-member Pulp, Paper and Woodworkers of Canada union, said that despite a recent deal reached by the PPWC and Catalyst, he was concerned about the vote’s fallout on his members still on the job, and PPWC’s retirees.
“We could be affected in some way if that (restructuring ) plans fails,” Zarry told the Cowichan News Leader Pictorial. “We’re playing the waiting game and getting all information possible to our members.”
North Cowichan Mayor Jon Lefebure was nervous too, as the mill’s demise would almost certainly spell more tax hikes for local home owners and business owners.
“We’re watching very closely because this is a huge concern for our whole community,” Lefebure said.
Catalyst owes $843 million, including $390 million to secured note holders and $250 million to unsecured note holders, with the balance generally due to trade creditors, the RSEA states in a release.
Catalyst’s Lyn Brown outlined the firm’s proposal in an e-mail to the Cowichan News Leader Pictorial.
“If creditors approve the current plan — and following lump-sum payout of no less than 90 per cent of the present pension value to members electing to opt out of the current plan — Catalyst would maintain and pay down the plan’s remaining shortfall. That would happen with a revised payment formula and longer payment schedule of 15 years, not the current seven-year schedule. This solution requires B.C. regulatory action including: a regulation, by cabinet order, under the Pension Benefits Standards Act allowing implement of the proposed solution; and regulator approval to change the payment schedule for the funding deficiency over the longer period contemplated.”