Crofton’s pulp-mill’s parent firm is out of creditor protection after a successful financial reorganization, Catalyst’s brass said Thursday.
CEO Kevin Clarke was happy with Catalyst’s reduced debt, interest and annual expenses — and he cheered Crofton’s unionized workers who inked a new labour deal, and North Cowichan council for helping his company weather recent financial storms.
Clarke declined to say if Catalyst will seek more tax relief from council after its hefty spring property-tax shift to homeowners from its biggest tax-and-job engine.
“We’ve always wanted to pay our fair share,” he told the News Leader Pictorial of Crofton mill employing about 600.
“We’ll be looking for a continuation in innovation related to reducing costs and providing value. We’re looking at how to reduce hydro and increase delivery of services.
“It’s been a very difficult process.”
Difficult too for North Cowichan councillors who faced the unpopular tax shift.
“I’m glad to hear Catalyst’s CEO is happy with the decision council made on the tax shift, but I’m not so sure residents are as happy,” said Councillor John Koury.
“I hope (Catalyst) takes advantage of decisions we made, and reinvests in our community to create jobs into the long run that’ll have spin-offs in job creation and economic activity in all sectors.
“Catalyst has a right to ask for more tax relief — it’ll be a tall order, certainly in the short-term.”
Still, Clarke commended council.
“I have tremendous admiration for Mayor Jon Lefebure. We’re looking for ways to improve and hire another 40 to 50 employees in Crofton.
“We’re bringing people back to the island. The mayor and his folks should take great pride.”
Clarke wasn’t so proud of Catalyst’s recent “collateral damage” that closed its operation in Snowflake Arizona.
But shrugging creditor protection means Catalyst is “repositioned and restructured to complete in today’s global world,” Clarke said, citing the hard-working Crofton mill’s place in a globally tough market.
“Most or all of our pulp from Crofton goes to Asia, and more and more of our paper from Crofton goes outside of North America.
“You have to be flexible; if you’re going to compete in the modern world, things change on a blip.”
From the firm’s complex reorganization and related transactions, Catalyst 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, a company release says.
Clarke also said of Catalyst will be issuing new equity shares by late October.
All of Catalyst’s common shares outstanding prior to the reorganization have been cancelled for no consideration.
Holders of those common shares will not receive any distribution under Catalyst’s amended plan, the company says.
Its amended plan was OK’ed at meetings of the company’s secured and unsecured creditors on June 25.
The plan was approved by B.C.’s Supreme Court on June 28.
The company has also entered into a previously announced new asset-backed loan facility and an exit-financing facility, Catalyst leaders state.
About US$35 million was drawn under the exit facility upon the implementation of the amended plan.