In the case of Catalyst Paper, a B.C. Supreme Court judge has ruled lender JPMorgan will remain first in line when it comes time to be paid.Catalyst Paper
One year after Catalyst Paper Corp. filed for creditor protection, the company is on the cusp of rejoining the Toronto Stock Exchange.
After obtaining the Supreme Court of British Columbia's approval for its restructuring plan in September, Catalyst got the green light on Friday to list its newly created common shares on the TSX next week.
The 14.4 million common shares now outstanding are entirely owned by the company's old secured note holders, who got them in exchange for taking a haircut on their debt holdings. Under the restructuring, the company lowered its debt load by $390-million, cutting $80-million of accrued interest.
Around the same time that the restructuring was finalized, Catalyst also tried to sell off some of its assets, including those in Elk Falls, which were permanently shut down in 2010 after being in operation for over 50 years. While a bidder emerged and offered to pay $8.6-million, the deal ultimately fell through.
However, Catalyst recently inked a deal to unload its Snowflake mill and assets in Arizona that manufacture recycled newsprint for $13.5-million (U.S.).
How well the company will perform in the future is unknown. The latest quarterly earnings were messy with restructuring costs, so it's hard to read much into them. But there were a few warning signs. Catalyst noted that North American demand for specialty paper product lines was down from the year prior -- in some cases quite dramatically -- falling 18 per cent for uncoated grades and 15 per cent for directory.
Tim Kiladze