Creditors approve Catalyst Paper restructuring plan
Relief at Catalyst Paper. After initial refusal to approve the company's restructuring plan, the majority of the creditors has now given its consent.
Catalyst Paper has received the necessary creditor approval for its second amended plan of arrangement under the Companies Creditors Arrangement Act in Canada. The company said more than 99% of secured and unsecured creditors voted in favour of the new restructuring plan on 25 June. “The plan which received creditor approval puts Catalyst on a stronger financial base to compete and adapt as the marketplace for our products continues to change,” said President and Chief Executive Officer Kevin J. Clarke.
In a related proceeding, Catalyst Paper also received BC Court approval to extend the period of CCAA protection to 30 September 2012, the paper manufacturer added.
At the end of May, the majority of creditors had voted against Catalyst Paper's restructuring plan. It had been approved by the overwhelming majority of secured creditors but failed to get the necessary two-third backing from the company’s unsecured lenders.
Catalyst Paper operates nine paper machines at four sites in Canada and the USA. The company produces almost 990,000 tpy of magazine paper, 470,000 tpy of newsprint and 335,000 tpy of market pulp. The company has filed for CCAA creditor protection in January, as it attempted to restructure its business.
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