Catalyst Paper’s four principal shareholders have agreed to support the company’s acquisition by Kejriwal Group International of Mumbai, India.
Whether the sale goes forward or not, it is unclear how the transaction will affect Port Alberni’s paper mill.
The support agreement, announced at the end of June on Catalyst’s website, is conditional on satisfactory due diligence by KGI as well as refinancing arrangements on the sellers’ part, the press release reads.
The four principal shareholders (or security holders) are Mudrick Capital Management, L.P., Cyrus Capital Partners, LP, Oaktree Capital Management, LP and Stonehill Capital Management LLC. Collectively, the four companies own 79 per cent of the shares.
“They’ve entered into this agreement, subject to these conditions being met, they’re going to vote in favour of the proposed transaction which would see KGI acquire Catalyst Paper,” said Eduarda Hodgins, director of organization development and communications at Catalyst.
The deal was reached between the four principal security holders and KGI. Catalyst Paper has not been involved in the discussions nor the agreement.
However, “the board of directors is encouraged by KGI’s proposal and will be pleased to review and evaluate the proposed transaction and the process contemplated by the support agreement.”
According to Hodgins, it’s unknown whether or not the potential sale will affect operations at the Port Alberni paper mill. There is also no guarantee that the deal will go through, she added.
The deadline for the deal is Nov. 30, 2016, although extensions are permitted.