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

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

  • May. 25, 2018 3:22 p.m.

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

Port Hardy Volleyball club requests funding from Port Hardy council

The sport of Volleyball is alive and well in the North Island,… Continue reading

North Island Seniors Housing Foundation takes the next step towards getting Trustee Road land

Seniors rejoice, Port Hardy council is very much in favour of helping… Continue reading

Should aquaculture programs be offered at North Island College in Port Hardy?

“I think it would be very timely to have an aquaculture program”

Island Health issues press release regarding Port Alice Health Centre service changes

Island Health will be hosting a community meeting in Port Alice Feb. 20 at 6 p.m. in the rec centre.

Vancouver Island Regional Library wants to team up with the Town of Port McNeill to build a new multi-use facility

“A new library for the town, as you know, will quickly become an exciting hub of literacy”

VIDEO: Canada’s flag turns 54 today

The maple leaf design by George Stanley made its first appearance Feb. 15, 1965

Eight cases of measles confirmed in Vancouver outbreak

Coastal Health official say the cases stem from the French-language Ecole Jules Verne Secondary

Plecas won’t run in next election if B.C. legislature oversight reforms pass

B.C. Speaker and Abbotsford South MLA says he feels ‘great sympathy’ for Jody Wilson-Raybould

Workshop with ‘accent reduction’ training cancelled at UBC

The workshop was cancelled the same day as an email was sent out to international students

Former B.C. premier Gordon Campbell accused of sexual touching

Accuser went to police, interviewed by Britian’s Daily Telegraph

Committee member Russell Murray talks Oscar Hickes memorial hockey tournament

Oscar Hickes is taking place in Port Alice at the Doug Bondue Arena March 28-31.

LETTER: Is BC Hydro’s Step Two rate discriminatory?

“This charge is strictly a penalty and has nothing to do with the cost of energy.”

North Island Bantam Eagles hammer Nanaimo Clippers, finish playoffs strong

The Eagles wasted no time coming out and firing on the Clippers in the Feb. 9 game.

North Island Peewee Eagles win back to back games, move on to semi-final showdown

The Eagles are back Feb. 17 in a semi-final matchup against the Peninsula Eagles in Port McNeill.

Most Read