Ongoing discussions with lenders to amend credit agreement
LONGUEUIL, QC, June 29 /CNW Telbec/ - SFK Pulp announces that, due to
difficult market conditions, it will be, as of June 30, 2009, in breach of the
interest coverage ratio prescribed in its credit agreement. Under the terms of
this agreement, SFK Pulp is required to maintain an interest coverage ratio of
2.0:1.0. SFK Pulp is currently in discussions with its lenders to negotiate an
amendment and is reasonably confident that it will reach a satisfactory
agreement with them in the near term.
SFK Pulp also announces that it will record a US$2.8 million provision in
its quarterly results for the period ending June 30, 2009, as a result of
Fraser Papers Inc.'s recent filing for protection under the Companies'
Creditors Arrangement Act (Canada). This amount represents all of the amounts
owed to SFK Pulp by Fraser Papers.
About SFK Pulp
SFK Pulp (TSX: SFK.UN), a leading producer and marketer of premium virgin
and recycled kraft pulp, operates three mills in Saint-Félicien, Québec,
Fairmont, West Virginia, and Menominee, Michigan. SFK Pulp employs
approximately 550 people, including 306 in its Saint-Félicien Mill, and has a
total annual production capacity of 745,000 metric tonnes. The Saint-Félicien
Mill supplies northern bleached softwood kraft (NBSK) pulp to various sectors
of the paper industry in Canada, the United States and Europe for use in
specialty products. The Fairmont and Menominee Mills manufacture air-dried
market recycled bleached kraft (RBK) pulp and primarily supply manufacturers
of uncoated freesheet, commercial and away-from-home tissue and coated paper
in the U.S.
For further information:
For further information: Investors and Analysts: Mrs. Patsie Ducharme,
SFK Pulp, Vice-President and Chief Financial Officer, (450) 677-7857 ext.
2225; Media and others: Mr. Dany Paradis, SFK Pulp, Vice-President, Change
Management and Public Affairs, (450) 677-7857 ext. 2227