RICHMOND, BC, Sept. 13, 2012 /CNW/ - Catalyst Paper announced today that
it has successfully completed its previously announced reorganization
pursuant to its Second Amended and Restated Plan of Compromise and
Arrangement (the Amended Plan) under the Companies' Creditors Arrangement Act.
As a result of the 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.
"We entered the reorganization process with a clear objective to put
Catalyst on stronger financial footing and we have done so," said Kevin
J. Clarke, President and CEO. "Many parties worked long and hard to
resolve balance sheet and cashflow issues constructively and quickly
throughout the process. I am very proud of our employees who stayed
focused throughout this challenging period. Sales kept our order book
strong, operations ran well and, going forward, we intend to capitalize
on the momentum generated to compete even more vigorously in the
markets for our products."
As a result of the reorganization under the Amended Plan:
Holders of First Lien Notes received in exchange for their US$390.4
million aggregate principal amount of First Lien Notes (and accrued and
US$250.0 million aggregate principal amount of secured notes (Plan
Notes) due in 2017 that bear interest, at the option of the company, at
a rate of 11% per annum in cash or 13% per annum payable 7.5% cash and
5.5% payment-in-kind (PIK); and
14,400,000 new common shares, being approximately 100% of the company's
issued and outstanding common shares, subject to dilution for (i) the issuance of common shares to unsecured
creditors who made an equity election pursuant to the terms of the
Amended Plan, and (ii) a new management incentive plan.
Holders of Unsecured Notes will receive in exchange for their US$250.0
million aggregate principal amount of Unsecured Notes (and accrued and
their pro rata share (calculated by reference to the aggregate amount of
all claims of Unsecured Creditors allowed under the Amended Plan) of
50% of the net proceeds following the sale of Catalyst Paper's interest
in Powell River Energy Inc. and Powell River Energy Limited Partnership
(the PREI Proceeds Pool), or
if an equity election was made, their pro rata share of 600,000 new
common shares (the Unsecured Creditor Share Pool).
Holders of General Unsecured Claims will receive in exchange for their
General Unsecured Claims:
their pro rata share of the PREI Proceeds Pool;
if an equity election was made, their pro rata share of the Unsecured
Creditor Share Pool; or
if the General Unsecured Claim was equal to or less than C$10,000
(unless an equity election was made), or if such creditor elected to
reduce their claim to $10,000, cash in an amount equal to 50% of the
creditor's allowed claim.
All common shares of the company outstanding prior to the reorganization
have been cancelled for no consideration and holders of such common
shares will not receive any distribution under the Amended Plan.
The Amended Plan was overwhelmingly approved at meetings of the
company's secured and unsecured creditors on June 25, 2012 and was
approved by the Supreme Court of British Columbia on June 28, 2012.
As part of the reorganization, the company has also entered into the
previously announced new asset backed loan (ABL) facility and exit
financing facility. Approximately US$35 million was drawn under the exit facility upon the implementation of the Amended
The company's new board of directors as of September 13, 2012 is
comprised of John Brecker, Giorgio Caputo, John Charles, Kevin J.
Clarke, Todd Dillabough, Walter Jones and Leslie Lederer.
"As we emerge from creditor protection, I want to acknowledge our former
board chairman Jeffrey Marshall and directors Thomas Chambers, William
Dickson, Douglas Hayhurst, Alan Miller, Geoffrey Plant and Dallas Ross
for their service to Catalyst Paper," said Mr. Clarke.
Speaking on behalf of the former board, Chairman Jeffrey Marshall
commended "the dedication, contributions and unwavering support of
Catalyst's employees and management team, unions, customers, suppliers,
retirees, and pensioners, as well as the support of the communities
where its mills and other facilities are located. Without this
commitment, coupled with the intensive and unyielding efforts of the
company's legal advisory team of Blake, Cassels & Graydon LLP; Skadden,
Arps, Slate, Meagher & Flom LLP; Lawson Lundell LLP; and the financial
advisory team of Perella Weinberg Partners, this result would not have
been achieved." Mr. Marshall further noted, "the court-appointed
Monitor, PricewaterhouseCoopers, also played a vital role in the
achievement of this well-balanced result."
Additional information regarding the Amended Plan and the company is
contained on the Monitor's website, which is available at www.pwc.com/car-catalystpaper and in Catalyst's information circular dated March 23, 2012 (the
Circular) available on SEDAR (www.sedar.com), EDGAR (www.sec.gov) and Catalyst's web page (www.catalystpaper.com). Terms used in this news release that are defined in the Circular have
Catalyst Paper manufactures diverse specialty mechanical printing
papers, newsprint and pulp. Its customers include retailers, publishers
and commercial printers in North America, Latin America, the Pacific
Rim and Europe. With four mills, located in British Columbia and
Arizona, Catalyst has a combined annual production capacity of 1.8
million tonnes. Capacity will be 1.5 million tonnes upon closure of the
mill in Snowflake, AZ effective September 30, 2012. The company is
headquartered in Richmond, British Columbia, Canada and is ranked by
Corporate Knights magazine as one of the 50 Best Corporate Citizens in
Certain matters set forth in this news release, including statements
with respect to the benefits of the reorganization are forward looking.
These forward-looking statements reflect management's current views and
are based on certain assumptions including assumptions as to future
operating conditions and courses of action, economic conditions and
other factors management believes are appropriate. Such forward looking
statements are subject to risks and uncertainties that may cause actual
results to differ materially from those contained in these statements,
including changes in economic conditions, currency fluctuations and those risks and uncertainties identified under the heading "Risk
Factors" in the Circular and under the heading "Risks and
Uncertainties" in Catalyst's management's discussion and analysis
contained in Catalyst's annual report for the year ended December 31,
2011 and report for the second quarter of 2012, all of which are
available at www.sedar.com.
SOURCE: Catalyst Paper Corporation
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