Workers at Crofton’s Catalyst mill are under intense pressure as they are being asked to ink a new labour deal crucial to the future of the company.
Catalyst boss Kevin Clarke is meeting with unionized Crofton millworkers today (Jan.17) to discuss impacts on the pulp giant’s financial and debt restructuring, union officials said.
Those three meetings involve members of the PPWC and CEP unions in the mill that, under restructuring terms, must have contracts signed with unions at its three B.C. mills by month’s end.
Its other mills include Port Alberni and Powell River.
“We can meet the (Jan. 31) deadline, but where it goes from there, I can’t say,” explained Kevin McPetrie, first vice-president of PPWC’s Local 2, Crofton.
Contracts with both unions at Crofton expire April 31, but talks are happening early due to the firm’s restructuring crisis, McPetrie explained.
“We’re still quite a distance away,” McPetrie — a 35-year Crofton worker — said of the private talks set to resume tomorrow (Jan. 18) between PPWC and Catalyst brass
“Talks have been constructive so far, but the condensed timeline makes it tough.”
He declined to talk about terms on the bargaining table but was optimistic a vote among workers would happen in the next couple of weeks.
That labour deal is among of conditions struggling Catalyst must reach for a recapitalization transaction that will result in a significantly reduced debt burden, the company explains in a press release.
Catalyst aims to implement recapitalization through a complex plan of arrangements under the Canada Business Corporations Act.
Implementation of the plan will be subject to approval by not less than two-thirds of the votes cast by secured creditors, the approval of the Supreme Court of B.C., and receipt of all necessary regulatory and stock exchange approvals, Catalyst agents said.
“In addition, the agreement is subject to termination if a new labour agreement with all union locals at the company’s Canadian mills has not been ratified by Jan. 31.”
The Vancouver Sun reported Monday that Catalyst’s shares closed at three cents on the Toronto Stock exchange.
But Catalyst’s management team and board of directors said they believed proposed recapitalization offers substantial benefits to their firm.
Those uplifts included enhanced flexibility to respond to market downturns for paper, newsprint and pulp; improved capital structure with a $315.4-million debt reduction; and reduced cash-interest expense with up to $25.5 million less in annual cash interest expense.
While the PPWC has talks scheduled, Catalyst’s Lyn Brown said Tuesday there is nothing new on the calendar with Crofton’s CEP local.
CEP agents were unavailable for comment about talks at the 54-year-old mill that is North Cowichan’s biggest taxpayer.
There are about 400 PPWC members at the Crofton mill, plus about 100 CEP workers.