Catalyst Paper to sell U.S. mills to Chinese company

Sale will allow company to focus on B.C. interests, says president Ned Dwyer

Catalyst Paper is selling its American mills in three cities to a Chinese company for US$175 million, Catalyst announced Friday, May 25.

The Richmond-based company said with the sale it will turn its focus toward its British Columbia-based businesses. Catalyst Paper owns paper mills in Port Alberni, Crofton and Powell River.

Catalyst has entered into a sales and purchase agreement with ND Paper LLC, a wholly owned subsidiary of Nine Dragons Paper Ltd., which trades on the Hong Kong Stock Exchange.

Once the sale is final, ND Paper LLC will acquire Catalyst’s Rumford, Maine and Biron, Wisconsin mills along with associated staff at the company’s U.S. operations centre in Dayton, Ohio, according to a company press release. Catalyst will remain involved during a transition period as a condition of sale.

READ: Fear new U.S. anti-dumping duties could price Catalyst out of business

READ: Province steps up to help Catalyst Paper in war against U.S. duties

Catalyst president and CEO Ned Dwyer said the transaction allows Catalyst to re-pay a significant portion of its debt “and focus on our British Columbia operations.

“We continue to pursue opportunities to improve the competitiveness of our company and our industry,” said Dwyer in a statement. “We also continue to work with the provincial and federal governments in our defence against the unwarranted imposition of U.S. countervailing and anti-dumping duties.”

The sale will have a positive effect on mills such as Port Alberni’s or Crofton’s, Catalyst vice-president of environment, health and safety Graham Kissack said. “In terms of the influence this has on Port Alberni’s mill, it’s actually positive because we’ve generated a substantial portion of cash from the transaction and we’re using that cash to pay down our debt,” Kissack said.

That means B.C.-based mills won’t be carrying as much debt, and Catalyst will be able to lower cost to service debt.

“The decision’s been made for now to pay down the debt,” Kissack added. “It was seen as our best approach forward at this time. We’re putting a great deal of focus in improving competitiveness in all three of our B.C. mills.”

Catalyst purchased the three American mills in July 2015 and put “a very effective team of Catalyst employees” in place to turn them around, he added. The management team “made some pretty substantial changes in those mills”—so much that Catalyst was able to sell them for three times the original purchase price, Kissack said.

The transaction is expected to close by the end of the second quarter upon the favourable vote of Catalyst’s shareholders, with a meeting of shareholders scheduled for June 11, 2018. The company said its three major shareholders, representing 87 percent of the outstanding shares, have agreed to vote in favour of the sale at the June meeting.

editor@albernivalleynews.com

Just Posted

New sawmill is only ‘phase one’ for San Group

Deal is first of several plans for Alberni company

BCHL: Bulldogs pick up one win on weekend road trip

Tanner Pochipinski earns first career BCHL goal

Steelhead, Huu-ay-aht submit plans for Kwispaa LNG Project

Total plan would cost $10 billion, last 25 years

Three strong earthquakes reported off Vancouver Island

The quakes, all measuring more than 6.0 on the richter scale, were about 260 kilometres west of Tofino

Mother passes SD70 trustee torch to daughter in Port Alberni

Jane Jones loses after one term, but proud of her daughter Connie Watts

Port Alberni gets into the Halloween spirit at dog show

54th annual event drew dogs of all breeds—and their humans

Canada announces $20M fund for women entrepreneurs

New federal program will provide up to $100,000 for female business owners to grow their operations

Vancouver Island man claims falling ice smashed his truck windshield

Man discovered volleyball-sized chunk ice on his truck Saturday, near Nanaimo, B.C.

B.C. veteran combats PTSD in the ring and on the farm

Cam Tetrault is a valuable contributor at Quesnel’s Two Rivers Boxing Club

B.C. vegan butcher to appear on Dragons’ Den

Victoria’s Very Good Butchers will star in Nov. 29 episode

Fast ferries from B.C. spotted in Egypt

Controversial aluminum BC Ferries vessels ’big white elephants covered in dust,’ eyewitness says

Canadian troops, families take shelter in hotel after Florida hurricane

Most of the Canadians were evacuated from the military base before Hurricane Michael

B.C. jury trial hears police-sting audio of man accused of killing girl, 12

Garry Handlen has pleaded not guilty to the first-degree murder of Monica Jack on May 6, 1978.

5 tips to keep trick-or-treaters safe this Halloween

BC Children’s Hospital has a few suggestions to keep Oct. 31 fun

Most Read