The US$236-million sale of White Birch Paper Company, which owns three newsprint mills in Canada, to BD White Birch Investment, LLC, has been approved by a Quebec court. The company has been in bankruptcy protection since February.
The sale of White Birch's assets also includes a mill in Virginia, and the deal still needs approval of the U.S. bankruptcy courts.
The majority owners of BD White Birch are funds managed by Black Diamond Capital Management, LLC and its affiliates, with Caspian Capital Advisors LLC also participating as equity owners.
White Birch indicated that operations will continue as normal during the sale process. The sale is expected to be completed in late November 2010, subject to certain regulatory approvals and other conditions.
White Birch Paper is the parent company of the F.F. Soucy mill in Rivière-du-Loup, the Stadacona mill in Quebec, and Papier Masson in Gatineau. The company's U.S. subsidiary, Bear Island Paper Company, is also included in the sale
According to a story in the Ottawa Citizen on Sept. 30, the deal is conditional on terminating benefit plans and negotiating new union contracts with employees.
While the Papier Masson workers could lose defined-benefit pensions and have production rules change, they appear safe for now from having the mill close, the Citizen notes.
The Communications, Energy and Paperworks Union said that any buyer should respect the collective agreement but declined further comment on the deal.
The Ottawa Citizen story pegs the value of the four mills at almost $700 million, but notes that the mills carry more than $650 million in debt and many creditors will only get a small slice of the sale price.
The complicated auction process that preceded BD White Birch's winning bid appears aimed at winning the support of various classes of creditors who still must vote in favour in order for White Birch to emerge from bankruptcy, states the Ottawa Citizen.