PORTLAND, Ore. — The Canadian Press Published on Tuesday, May. 06, 2008 2:45PM EDT Last updated on Monday, Mar. 30, 2009 3:37PM EDT
Pope & Talbot Inc. is preparing to shut its three remaining pulp mills — employing nearly 1,000 workers in British Columbia and Oregon — after creditors declined to extend financing to the bankrupt wood products company, a U.S. business publication reports.
Mark Rossolo, a spokesman for Portland-based Pope & Talbot, told the Portland Business Journal that a Canadian bankruptcy court on Monday extended the company's bankruptcy protection for 48 hours as it tries to sell the pulp mills.
The bank's creditors declined to extend the financing to keep the mills operating, so Pope & Talbot began a process to shut down operations at the mills within 48 hours, Mr. Rossolo said in an article posted online late Monday.
The two British Columbia mills in Nanaimo and Mackenzie employ about 800, while the Oregon mill at Halsey, south of Portland, had a work force of 180 in February.
The company is preparing a forecast of the financial assets it will need to maintain the idle mills, Mr. Rossolo said in an interview with the Journal.
An agreement to sell the Nanaimo, Mackenzie and Halsey mills to PT Pindo Deli for $105.3-million (U.S.) collapsed Friday. PT Pindo Deli is a subsidiary of Asia Pulp and Paper, which is owned by Indonesia's Sinar Mas Group, Asia's largest paper producer.
Rossolo said Pope & Talbot is still working to reach an agreement with Sinar Mas, but it's also considering other options such as selling off the assets individually.
PT Pindo Deli, in a separate deal, had agreed to buy Pope & Talbot's Fort St. James sawmill in B.C. for $6-million. Mr. Rossolo said that sale has also not closed, but the companies continue to negotiate.
Pope & Talbot, a 160-year-old Portland-based wood products company, filed the third-largest bankruptcy in state history in November after fighting a losing battle with the slumping housing market, a strengthening Canadian dollar which hurt its exports from B.C. into the United States, and high debt levels.
In order to secure an emergency $89-million loan, the company subsequently agreed to sell all its assets by mid-February.
At the time of its bankruptcy, the company had eight mills, including the three pulp mills.
Deals for four of the company's mills have already been finalized.
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