Displaying items by tag: catalyst paper corporation
Two Lawsuits Filed by Halalt First Nation Against Catalyst
Catalyst Paper (TSX: CYT) has just announced that it has been served with two Notices of Civil Claim by the Halalt First Nation and its business partners. Catalyst denies the allegations contained in both claims and intends to vigorously defend itself.
The first claim was filed by the Halalt and its members alleging Catalyst has illegally trespassed on, and caused damages to, the Halalt's asserted territories and fisheries resources through the operation of Catalyst's Crofton Mill since 1957. The Halalt is seeking an interim and permanent injunction restraining Catalyst from conducting its operations at the Crofton Mill that interfere with the Halalt's claimed riparian, water and land rights and are also seeking approximately $2 billion in damages.
The second claim was filed jointly by the Halalt, Sunvault Energy Inc. and Aboriginal Power Corp. alleging Catalyst disclosed certain confidential information pertaining to a proposed anaerobic digester facility in breach of a confidentiality agreement. The plaintiffs are seeking, among other things, approximately $100 million in damages from Catalyst in connection with the alleged breach of contract and a permanent injunction restraining Catalyst from constructing, owning or operating an anaerobic digester facility.
About Catalyst Paper
Catalyst Paper manufactures diverse printing papers such as coated freesheet, C1S, coated and uncoated groundwood, newsprint, directory, as well as market pulp. Customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.3 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada, and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
SOURCE Catalyst Paper Corporation
Catalyst announces appointment of Senior Vice President and Chief Financial Officer
Catalyst Paper Corporation (TSX:CYT) has announced the appointment of Frank C. De Costanzo as Senior Vice President and Chief Financial Officer.
A seasoned treasury and finance executive with significant experience and banking relationships across the globe, Mr. De Costanzo joins Catalyst from Kinross Gold Corporation, one of the world's largest gold mining companies, where he has served as Vice President and Global Treasurer since 2010.
Prior to Kinross, he held a progression of senior financial roles with Pitney Bowes Inc., The Dai-Ichi Kangyo Bank, Ltd. and Union Bank of Switzerland AG in North America, Europe and Asia. Mr. De Costanzo holds a Bachelor of Science degree in Finance and a Master of Business of Administration degree.
"I am very pleased to welcome Mr. De Costanzo to Catalyst," said Joe Nemeth, President and Chief Executive Officer. "His depth of finance and treasury experience, combined with his extensive global relationships, and proven success at large and complex businesses will serve Catalyst well."
Frank will join Catalyst on July 20th, 2015.
About Catalyst Paper
Catalyst Paper manufactures diverse printing papers such as coated freesheet, coated and uncoated groundwood, newsprint, directory, as well as market pulp. Customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.3 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
SOURCE Catalyst Paper Corporation
For further information:
Investor inquiries: Joe Nemeth, President & CEO, 604-247-4012, This email address is being protected from spambots. You need JavaScript enabled to view it.; Media inquiries: Eduarda Hodgins, Director, Organization Development & Communications, 604-290-3547, This email address is being protected from spambots. You need JavaScript enabled to view it.
Catalyst Paper named one of Canada's top corporate citizens
Catalyst Paper has announced that it has been named for the ninth consecutive year as one of the Best 50 Canadian Corporate Citizens by Corporate Knights, "the magazine for clean capitalism", which reports on corporate sustainability and transparency and produces numerous indices, including Canada's Best 50 Corporate Citizens.
"We are proud to be recognized for our long-term commitment to environmental sustainability and stewardship," said Joe Nemeth, President and CEO. "We voluntarily produced our first Sustainability Report in 1993 and have strived ever since in our commitment to sustainability through efforts at certified fibre sourcing and chain of custody, manufacturing efficiency, green-energy generation and making paper products responsibly."
This year, Catalyst was one of 153 companies considered by Corporate Knights for its Best 50 list, and evaluated across 12 key performance indicators covering resource, employee and financial management, and from information that was disclosed voluntarily in Catalyst's public reports, financial filings and sustainability reports.
The honour reflects Catalyst's ongoing commitment and engagement with many partners and organizations to implement real sustainability and capacity-building initiatives. Our areas of work include helping protect the Great Bear Rainforest, developing transparency in reporting environmental impact, supporting growth of forest certification schemes, and supporting development and implementation of carbon reduction policies and practises.
About Catalyst Paper
Catalyst Paper manufactures diverse printing papers such as coated freesheet, coated and uncoated groundwood, newsprint, directory, as well as market pulp. Customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.3 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada.
SOURCE Catalyst Paper Corporation
For further information:
Graham Kissack, Sustainability Consultant, (250) 929-0123, or Eduarda Hodgins, Director Organization Development and Communications, (604) 247-4369
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2nd Floor, 3600 Lysander Lane, Richmond, BC, V7B 1C3, Canada
www.catalystpaper.com
Q4 results reflect key decisions to position Catalyst for the future
Catalyst Paper (TSX:CYT) has announced earnings before interest, taxes, depreciation and amortization (EBITDA) of $6.8 million in Q4 compared to $8.0 million in Q3.
Catalyst reported a net loss, excluding specific items, of $10.4 million in Q4 compared to $10.8 million in Q3. Operating results were impacted by increased manufacturing expenses, including higher rates for electricity, as well as costs related to the indefinite curtailment of Paper Machine No. 9 at the Powell River mill, and the acquisition of the Biron paper mill in Wisconsin and the Rumford pulp and paper mill in Maine.
"Our results reflect critical decisions to position the company effectively for the future," said Joe Nemeth, Catalyst President & CEO. "In Q4, we incurred one-time costs and made strategic investments that will enable us to optimize our product mix and performance, while continuing to focus on cost, productivity, efficiency and customer service."
North American paper demand was down in the fourth quarter for all segments with the exception of lightweight coated and uncoated paper. Benchmark prices remained flat for specialty grades and declined for newsprint and pulp. Despite sluggish markets, sales revenues increased modestly in Q4 compared to Q3 due to the positive impact of a weaker Canadian dollar, higher average transaction prices for pulp, and increased sales volumes for newsprint, uncoated mechanical and lightweight coated paper.
Results for the Year
Adjusted EBITDA was $47.6 million in 2014 compared to $46.1 million in 2013. Excluding specific items, our net loss was $28.3 million in 2014 compared to $31.5 million in 2013. Free cash flow was negative $17.2 million compared to negative $21.4 million in 2013.
These results understate the year-over-year improvement we achieved, as we incurred one-time costs of $3.1 million to complete the acquisition of the US assets and did not have the $4.3 million in EBITDA contribution from our interest in Powell River Energy Inc. that existed in 2013. After normalizing for these non-recurring items, adjusted EBITDA increased by $8.9 million compared to the prior year.
"Where we applied a sharp focus on operational excellence, we made substantive progress," said Joe Nemeth, Catalyst President & CEO. "As we look ahead to 2015, we expect continued improvement as we work diligently to realize the benefits of our US acquisition, revitalize our Powell River operations and consistently apply the operational excellence principles that have enabled our financial recovery."
Cost factors beyond the company's control continued to challenge the competitiveness of the business. In 2014, manufacturing costs were higher mainly due to price increases in fibre, chemicals, steam fuel and electrical power, which represents a major cost for our energy-intensive business.
A critical priority in 2014 was implementing initiatives to mitigate the increasing cost of hydroelectricity. The company took advantage of a new Power Smart Program extended to pulp producers that provides 75% of capital funding for equipment upgrades that more efficiently harness energy. Through its efforts to mitigate power usage, the company expects to realize funding potential of approximately $45 million through the Program.
Liquidity
Our total liquidity as of December 31, 2014 was $102.7 representing a $19.9 million decrease from the prior year. This decrease reflects negative free cash flow of $17.2 million generated for the year.
| 1 | Refer to section 11, Non-GAAP measures, of our Q4 2014 management's discussion and analysis. |
| 2 | Numbers exclude the Snowflake mill's results from operations which have been reclassified as discontinued operations; earnings from discontinued operations, net of tax, are shown separately from continuing operations in the consolidated statements of earnings (loss) in our annual consolidated financial statements for the year ended December 31, 2014. |
| 3 |
Earnings per share data for periods ended on and subsequent to September 30, 2012 were based on the weighted average common shares issued pursuant to our reorganization under CCAA. Earnings per share data for periods prior to September 30, 2012 were based on the weighted average common shares outstanding prior to emergence from creditor protection proceedings. These shares were cancelled on September 13, 2012. |
Outlook
A key focus for 2015 is the full integration of the Biron and Rumford mills. Our approach is to identify opportunities to optimize production, product mix and performance. We have recruited additional talent to enhance our sales capacity and capabilities, and to ensure we can continue to distinguish Catalyst as the industry's leading provider of quality products and superior services to customers worldwide.
Mitigation of increasing hydroelectricity rates remains a priority in 2015. We have launched a pilot program in concert with BC Hydro at all of our Canadian mills that financially rewards the company for shifting energy use within specific timeframes. We will explore all feasible opportunities to mitigate the impact of escalating rates, including another 6% increase planned by BC Hydro on April 1.
We anticipate that specialty printing paper markets in North America will remain challenging with the continued evolution of digital media and the displacement of printed mediums. Our strategy within this market is to focus on lightweight niches in all printing and writing grades, and to increase sales of higher-value products, including coated free sheet and coated one side grades.
Further Quarterly Results Materials
This release, along with the full annual Management Discussion &Analysis, Financial Statements and accompanying notes are available on our web site at www.catalystpaper.com/Investors. This material is also filed with SEDAR in Canada and EDGAR in the United States.
Catalyst manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.3 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
Catalyst Paper appoints two industry veterans to key US positions
Catalyst Paper Corporation (TSX:CYT) has announced the appointment of Greg Maule as Senior Vice-President, US Operations and Linda McClinchy as Vice-President, US Supply Chain.
Mr. Maule has held a progression of positions with increasing responsibility in paper operations leading to the role of mill manager at several large pulp and paper facilities in the Midwest. Most recently, he was Vice-President, Manufacturing Operations at NewPage Corporation. Mr. Maule brings with him more than 25 years of experience to oversee the optimization of productivity, quality and efficiency of Catalyst's mills in Biron, Wisconsin and Rumford, Maine. Mr. Maule holds a Master of Science, Pulp and Paper Engineering from the Institute of Paper Science and Technology.
Ms. McClinchy, who will lead the customer supply chain for Catalyst's US operations, most recently held the position of Vice-President, Customer Service at NewPage Corporation. She brings more than 30 years of experience in customer service, planning and scheduling, and logistics to this new role. Ms. McClinchy holds a Master of Business Administration from Lake Superior State University.
"I'm excited about the expertise and industry knowledge that Mr. Maule and Ms. McClinchy will bring to our Company, and I'm confident in their ability to achieve our US business objectives, while enabling the effective alignment of our North American operations," says Joe Nemeth, President and Chief Executive Officer.
About Catalyst Paper Corporation
Catalyst manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.1 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
SOURCE Catalyst Paper Corporation
For further information:
For investor inquiries: Brian Baarda, Vice-President, Finance & CFO, 604-329-5370, This email address is being protected from spambots. You need JavaScript enabled to view it., For media inquiries: Eduarda Hodgins, Director, Organization Development & Communications, 604-290-3547, This email address is being protected from spambots. You need JavaScript enabled to view it.
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2nd Floor, 3600 Lysander Lane, Richmond, BC, V7B 1C3, Canada
www.catalystpaper.com
Catalyst Paper Corporation completes acquisition of paper mills in Wisconsin and Maine
Catalyst Paper Corporation (TSX: CYT) ("Catalyst") is pleased to announce that it has completed the acquisition of the Biron paper mill located in Wisconsin and the Rumford pulp and paper mill located in Maine, USA that was previously announced on October 30, 2014 (the "Acquisition"), from NewPage Corporation, NewPage Wisconsin System Inc., and Rumford Paper Company (the "Sellers"). The cash payment made on closing was US$62.4 million, after giving effect to an adjustment under the purchase agreement based on estimated working capital at closing, and the final purchase price is subject to certain additional post-closing adjustments.
"This acquisition represents a new chapter in the history of Catalyst Paper," says Joe Nemeth, President and Chief Executive Officer. "With the addition of the Rumford and Biron mills, Catalyst becomes a larger and stronger company with five facilities across North America and an estimated production capacity of 2.1 million tons of paper and 500 thousand tons of pulp. Catalyst is now the only producer in North America with manufacturing facilities in the West, Midwest and East, and has an enhanced product suite to effectively meet global customer needs."
On closing of the Acquisition Catalyst, through its subsidiary, also acquired from the Sellers certain properties and assets used to operate the two mills. Catalyst and its subsidiaries also entered into various ancillary agreements with the Sellers providing for, among other things, the purchase and sale of certain raw materials to and from the mills, transition of certain customer orders and accounts, license or transfer of certain intellectual property rights, treatment and disposal of waste and wastewater and certain transitional services.
Catalyst will commence reporting operating and production information for the Rumford and Biron mills with its First Quarter Report.
The Acquisition was financed through advances under Catalyst's ABL Credit Facility. As previously announced, Catalyst entered into an amendment to its ABL Credit Facility to increase the maximum amount of credit available thereunder from CDN$175.0 million to CDN$225.0 million.
Catalyst has also closed today its previously announced US$25.0 million (principal amount) offering (the "Offering") of PIK Toggle Senior Secured Notes ("Offered Notes"). The Offered Notes are on substantially the same terms and form part of the same series as Catalyst's existing PIK Toggle Senior Secured Notes. The Offered Notes were issued at a 20% discount to face value with Catalyst receiving gross proceeds under the Offering of US$20 million. The proceeds of the Offering are intended to provide additional working capital and to pay down a portion of the balance under the ABL Credit Facility. As a result of the Offering, Catalyst now has US$260.5 million principal amount of outstanding PIK Toggle Senior Secured Notes.
About Catalyst Paper Corporation
Catalyst manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With five mills across North America, Catalyst has annual production capacity of 2.1 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
Cautionary Note Regarding Forward Looking Statements:
Statements in this news release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws (collectively, "forward-looking statements"). All statements, other than statements of historical fact, are forward-looking statements.
Generally, forward-looking statements can be identified by the use of words or phrases such as "expects," "anticipates," "plans," "projects," "estimates," "assumes," "intends," "strategy," "goals," "objectives," "potential" or variations thereof, or statements to the effect that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The forward-looking statements in this news release relate to, among other things: estimated production capacity, the integration of the Rumford and Biron Mill, and Catalyst's operations and products after the closing of the Acquisition. These forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including: the ability to successfully integrate the Acquisition; the impact of general economic conditions in the countries in which Catalyst does business; conditions in the capital markets and Catalyst's ability to obtain financing and refinance existing debt; market conditions and demand for Catalyst's products (including declines in advertising and circulation); the implementation of trade restrictions in jurisdictions where Catalyst's products are marketed; fluctuations in foreign exchange or interest rates; raw material prices (including wood fibre, chemicals and energy); the effect of, or change in, environmental and other governmental regulations; uncertainty relating to labour relations; the availability of qualified personnel; the availability of wood fibre; legal proceedings; the effects of competition from domestic and foreign producers; the risk of natural disaster and other factors, many of which are beyond Catalyst's control, including those risks and uncertainties identified under the heading "Risks and Uncertainties" in Catalyst's management's discussion and analysis contained in Catalyst's annual report for the year ended December 31, 2013 available on Catalyst's website at www.catalystpaper.com/investors and at www.sedar.com and www.sec.gov.
Forward-looking statements are based on what Catalyst's management considers to be reasonable assumptions, beliefs, expectations and opinions based on the information currently available to it. Assumptions have been made regarding, among other things, Catalyst's ability to successfully integrate the Biron and Rumford paper mills; Catalyst's ability to manufacture and sell new products and services that meet the needs of its customers and gain commercial acceptance; Catalyst's ability to continue to sell its products and services in the expected quantities at the expected prices and expected times; Catalyst's ability to successfully obtain cost savings from its cost reduction initiatives; Catalyst's ability to implement business strategies and pursue opportunities; expected cost of goods sold; expected component supply costs and constraints; and expected foreign exchange and tax rates. Catalyst cannot assure you that actual events, performance or results will be consistent with these forward looking statements, and management's assumptions may prove to be incorrect. Forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and Catalyst does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking statements.
SOURCE Catalyst Paper Corporation
For further information:
For investor inquiries: Brian Baarda, Vice-President, Finance & CFO, 604-247-4710, This email address is being protected from spambots. You need JavaScript enabled to view it.; For media inquiries: Eduarda Hodgins, Director, Organization Development & Communications, 604-247-4369, This email address is being protected from spambots. You need JavaScript enabled to view it.
Catalyst announces milestone in acquisition of paper mills in Maine and Wisconsin
Catalyst Paper Corporation (TSX: CYT) ("Catalyst") has announced that an important milestone has been achieved in the previously announced acquisition by Catalyst of the Biron paper mill in Wisconsin and the Rumford pulp and paper mill in Maine, USA from NewPage Corporation, NewPage Wisconsin System Inc. and Rumford Paper Company (the "Acquisition").
This step forward was made possible by the announcement by the United States Department of Justice that it had filed a Proposed Final Judgment and a Hold Separate Stipulation and Order with the U.S. District Court for the District of Columbia, embodying a consent settlement in connection with the proposed acquisition by Verso Paper Corp. of NewPage Holdings Inc. (the "Verso Transaction"). Subject to the Verso Transaction being completed and certain other closing conditions being met, Catalyst will be able to proceed with the Acquisition and anticipates a closing date on or about January 7, 2015.
"This Acquisition enhances our long-term competitiveness and is expected to make Catalyst a stronger company more effectively positioned for the future," says Joe Nemeth, President and CEO. "With the addition of the Biron and Rumford mills, Catalyst will be able to offer its new and existing customers a more diversified and higher-value product suite, complemented by our commitment to quality service focused on understanding and meeting our customers' needs."
As previously disclosed, Catalyst anticipates that the $50.0 million increase in the maximum amount of credit available under Catalyst's asset-based credit facility and US$25.0 million (principal amount) offering (the "Offering") of additional PIK toggle senior secured notes will close concurrently with the Acquisition, subject to satisfaction of certain closing conditions, including the approval of the Toronto Stock Exchange ("TSX") in case of the Offering.
As described in more detail in Catalyst's November 28, 2014 news release, pursuant to TSX rules, closing of the Offering is subject to shareholder approval, excluding shares held by two insiders of Catalyst that would be eligible to acquire notes under the Offering. Catalyst has obtained written consents of shareholders sufficient to satisfy such TSX requirement.
About Catalyst Paper Corporation
Catalyst manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills in British Columbia, Catalyst has annual production capacity of 1.5 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
Cautionary Note Regarding Forward Looking Statements:
Statements in this news release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws (collectively, "forward-looking statements"). All statements, other than statements of historical fact, are forward-looking statements. Generally, forward-looking statements can be identified by the use of words or phrases such as "expects," "anticipates," "plans," "projects," "estimates," "assumes," "intends," "strategy," "goals," "objectives," "potential" or variations thereof, or statements to the effect that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The forward-looking statements in this news release relate to, among other things: the closing and the timing of the closing of the Verso Transaction, the increase in the asset-based credit facility, the Offering, the Acquisition and Catalyst's operations and products after the closing. These forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied, including: the ability to successfully integrate the Acquisition; the impact of general economic conditions in the countries in which Catalyst does business; conditions in the capital markets and Catalyst's ability to obtain financing and refinance existing debt; market conditions and demand for Catalyst's products (including declines in advertising and circulation); the implementation of trade restrictions in jurisdictions where Catalyst's products are marketed; fluctuations in foreign exchange or interest rates; raw material prices (including wood fibre, chemicals and energy); the effect of, or change in, environmental and other governmental regulations; uncertainty relating to labour relations; the availability of qualified personnel; the availability of wood fibre; legal proceedings; the effects of competition from domestic and foreign producers; the risk of natural disaster and other factors, many of which are beyond Catalyst's control, including those risks and uncertainties identified under the heading "Risks and Uncertainties" in Catalyst's management's discussion and analysis contained in Catalyst's annual report for the year ended December 31, 2013 available on Catalyst's website at www.catalystpaper.com/investors and at www.sedar.com and www.sec.gov.
Forward-looking statements are based on what Catalyst's management considers to be reasonable assumptions, beliefs, expectations and opinions based on the information currently available to it. Assumptions have been made regarding, among other things, closing of the Verso Transaction, Catalyst's ability to successfully integrate the Biron and Rumford paper mills; Catalyst's ability to manufacture and sell new products and services that meet the needs of its customers and gain commercial acceptance; Catalyst's ability to continue to sell its products and services in the expected quantities at the expected prices and expected times; Catalyst's ability to successfully obtain cost savings from its cost reduction initiatives; Catalyst's ability to implement business strategies and pursue opportunities; expected cost of goods sold; expected component supply costs and constraints; and expected foreign exchange and tax rates. Catalyst cannot assure you that actual events, performance or results will be consistent with these forward looking statements, and management's assumptions may prove to be incorrect. Forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and Catalyst does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change, other than as required by applicable law. For the reasons set forth above, readers should not place undue reliance on forward-looking statements.
SOURCE Catalyst Paper Corporation
For further information:
For investor inquiries: Brian Baarda, Vice-President, Finance and CFO, 604-329-5370, This email address is being protected from spambots. You need JavaScript enabled to view it.; For media inquiries: Eduarda Hodgins, Director, Organization Development & Communications, 604-290-3547, This email address is being protected from spambots. You need JavaScript enabled to view it.
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2nd Floor, 3600 Lysander Lane, Richmond, BC, V7B 1C3, Canada
www.catalystpaper.com
Catalyst Paper Corporation to purchase paper mills in Maine and Wisconsin
Catalyst Paper Corporation (TSX: CYT) ("Catalyst" or the "Company") has announced that it has entered into an Asset Purchase Agreement (the "Agreement") with NewPage Corporation, NewPage Wisconsin System Inc. and Rumford Paper Company (the "Sellers") to purchase the Biron paper mill located in Wisconsin and the Rumford pulp and paper mill located in Maine, USA (the "Paper Mills") for consideration of US$74.0million, subject to certain adjustments (the "Transaction").
Catalyst intends to finance the acquisition through a combination of advances under its revolving asset-based credit facility (the "ABL Credit Facility"), the maximum amount of which is to be increased in connection with the Transaction. To provide additional working capital following the consummation of the Transaction, Catalyst also intends to effect a US$25.0 million offering of additional PIK Toggle Senior Secured Notes ("Additional PIK Toggle Notes"), which would form part of the same series as Catalyst's outstanding PIK Toggle Senior Secured Notes (the "PIK Toggle Notes").
Completion of the Transaction is subject to customary closing conditions, including the completion of the previously announced acquisition by Verso Paper Corp. of NewPage Holdings Inc. (the "Verso Transaction"), the execution of a transition service agreement, materials and service supply agreements, and certain other ancillary agreements relating to the Transaction, and certain regulatory approvals. There is no financing condition to Catalyst's obligation to consummate the Transaction. The Agreement may be terminated by the Sellers and Catalyst in certain circumstances, including upon or at any time following the final uncontested termination of the Verso Transaction.
"With this Transaction, Catalyst will be better able to serve new and existing customers through operational synergies and a more diversified and higher value suite of products," said Joe Nemeth, President and CEO of Catalyst.
"Our acquisition of these U.S. pulp and paper mills, once complete, will support our efforts to improve our balance sheet and enhance the Company's long-term competitiveness," added Nemeth.
If the Transaction is completed, the addition of the Paper Mills is expected to increase Catalyst's production capacity by approximately 65 per cent or 995 thousand tonnes per year. The Biron Wisconsin mill has 355 thousand tonnes capacity for lightweight coated and ultra-lightweight coated paper. The Rumford Maine mill has 510 thousand tonnes paper capacity for coated specialty, coated freesheet and coated groundwood paper, and 130 thousand tonnes Kraft market pulp capacity to produce both hardwood and softwood pulp. Efficiencies are expected to be gained as overhead costs will be distributed over a larger production base. Access to new markets and business opportunities is anticipated.
Based on unaudited historical financial summaries prepared by the Sellers, the Paper Mills achieved total sales of US$782.2 million for the twelve months ended September 30, 2014 and US$787.1 million for the twelve months ended December 31, 2013. Total mill contribution was US$29.5 million and normalized mill contribution was US$45.6 million for the twelve months ended September 30, 2014, compared to US$72.4 million for mill contribution and normalized mill contribution for the twelve months ended December 31, 2013. Mill contribution is a non-U.S. GAAP measure of mill operating performance defined as total sales minus the cash cost of goods sold. Mill contribution was normalized for the twelve months ended September 30, 2014 for the adverse impact of extreme weather conditions and market curtailment. These figures do not include sales, general and administrative expenses which are estimated to be approximately US$10.0 million per year. Capital spending for the two mills is expected to be similar to that of our Canadian mills, approximately US$7.0 million per facility per year.
Transaction and Financing
Under the terms of the Agreement, Catalyst will acquire the Paper Mills for consideration of US$74.0 million, subject to certain adjustments, and assumption of certain ongoing obligations related to the Paper Mills. Pre-closing environmental and pension liabilities will be retained by the Sellers.
To assist in financing the acquisition and provide additional working capital, Catalyst has received a Letter of Commitment from Canadian Imperial Bank of Commerce and Wells Fargo Capital Finance Corporation Canada to increase the Company's ABL Credit Facility by $50.0 million, from $175.0 million to $225.0 million, the maximum amount of credit available under the ABL Credit Facility. Catalyst has received the requisite consent from holders of PIK Toggle Notes to give effect to the increase in the ABL Credit Facility. The availability of the proposed increase in the ABL Credit Facility is subject to the satisfaction of certain customary conditions, including the entering into by the relevant parties of required amendments to the credit agreement governing the ABL Credit Facility.
To provide additional working capital following the completion of the Transaction, Catalyst also intends to issue US$25.0 million of Additional PIK Toggle Notes. The Additional PIK Toggle Notes will be offered by Catalyst to eligible holders of PIK Toggle Notes, with eligible offerees being permitted to subscribe for their pro-rata share of Additional PIK Toggle Notes based on the aggregate principal amount of PIK Toggle Notes held by such holders relative to the total aggregate principal amount of outstanding PIK Toggle Notes. The Additional PIK Toggle Notes will be issued at a 20% discount to face value. When issued, the Additional PIK Toggle Notes are expected to form part of the same series of notes as the PIK Toggle Notes. Catalyst and certain holders of its PIK Toggle Notes have executed a definitive term sheet to backstop the issuance of Additional PIK Toggle Notes. The offering of Additional PIK Toggle Notes is expected to close concurrently with the consummation of the Acquisition or shortly thereafter. As the terms of the offering of Additional PIK Toggle Notes have not been finalized, there is no certainty that such a financing will be completed or completed on the terms described above. Completion of any such offering will be subject to receipt of any required third party, regulatory and exchange approvals.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. None of the securities have been or will be registered under the United States Securities Act of 1933, as amended (the "1933 Act"). Such securities may not be offered or sold in the United States absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.
Advisors
CIBC is acting as financial advisor to Catalyst and its Board of Directors. Catalyst's legal counsel is Sidley Austin LLP and Lawson Lundell LLP.
About Catalyst Paper Corporation
Catalyst manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills in British Columbia, Catalyst has annual production capacity of 1.5 million tonnes. Catalyst is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
SOURCE: Catalyst Paper Corporation
For further information:
Brian Baarda
Vice-President, Finance and CFO
604-247-4710
BC Hydro Power Smart Program boosts viability for mechanical pulp producers
Catalyst Paper (TSX:CYT) has announced that the Ministry of Energy and Mines and BC Hydro have introduced a new energy efficiency program aimed at reducing the power costs of mechanical pulp producers. The Power Smart program provided an injection of $100 million over three years and is aimed at reducing energy intensity and improving energy efficiency used in the thermal-mechanical pulping process at seven pulp facilities throughout British Columbia.
This funding will benefit our three mills located in the communities of Crofton, Port Alberni and Powell River. The first project that Catalyst is in the advanced stages of planning for is a project in Powell River that utilizes waste steam to reduce our electrical load on the BC Hydro system. The project has an expected capital cost in excess of $25 million of which Power Smart funding will cover 75% and reduces energy cost by an estimated $5 million annually. "We are pleased with this outcome after several months of open dialogue examining all sides of this complex situation," says Catalyst President and CEO Joe Nemeth. "This program improves the viability of the energy-intensive mechanical pulping industry and will help ensure the economic benefits we generate throughout the province will continue."
In addition to more than one million tonnes of paper, Catalyst produces 355,000 tonnes of pulp sold to customers in Asia, consuming an annual capacity of approximately 3.5 million gigajoules of energy in the process. Catalyst plans to leverage the Power Smart program by upgrading equipment to efficiently harness energy, reducing its energy waste and load on BC Hydro's system.
Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
SOURCE: Catalyst Paper Corporation