A second vote on the sale of Catalyst Paper Corp. assets could be in the offing.
At Monday’s city council meeting, Mayor John Douglas said he’s been privy to high-level discussions with B.C. Premier Christy Clark as well as with former finance minister Colin Hansen about the Catalyst issue.
According to Douglas, the government was headed in a “positive direction” with respect to the pension issue, help with BC Hydro, and jobs training.
There could “possibly be a re-vote on the whole issue,” Douglas said.
An announcement on the pension and Hydro issues is forthcoming, city manager Ken Watson said.
According to a Catalyst press release, the paper giant is trying to rustle up support of its secured noteholders for an amended restructuring plan.
If enough support can be corralled, the company will ask for a court-ordered creditor vote on the amended plan as soon as possible.
The firm hopes the new plan addresses the issue of pensions vested by former salaried employees, and convinces creditors to reconsider after they rejected a similar plan May 23 by a three per cent margin.
The company estimates a new plan will save approximately $7 million annually, Catalyst notes.
Minister of Finance Kevin Falcon indicated to the company that he is prepared to submit the proposal to cabinet with a positive recommendation.
Catalyst is in the midst of a Sales and Investor Solicitation Procedures (SISP) with prospective buyers.
But, “Catalyst will suspend the SISP only in the event that the amended plan is approved by its secured and unsecured creditors and approved by the court at a sanction hearing,” the release noted.
Catalyst Salaried Employees and Pensioners Group spokesperson Gary McCaig said he is cautiously optimistic about the development.
“This represents significant progress in terms of what we have been asking for,” McCaig said. “It also reflects the fact that government has become a lot more involved in this in the last few weeks.”
McCaig, who represents the interests of 1,400 pensioners, said he’s been in contact with Hansen about the issue and is apprised of developments.
McCaig’s members belong to a defined benefits plan, which is under-funded by $115 million, he said.
If the company is restructured then the plan is preserved. If it’s sold, however, then the new owners aren’t obligated to inherit the plan.
McCaig said he’s hopeful that the move for a second vote gains enough traction to succeed this time.
“Sixty four per cent voted in favour of it last time and it needed 66.66 per cent,” McCaig said. “I hope there’ll be enough to carry it this time.”