Northern Pulp Granted Creditor Protection Until the End of 2020
By Michael Gorman for CBC News
Supporters of Northern Pulp protest outside Province House on Dec. 19, 2019. (Kassandra Nadeau-Lamarche/Radio-Canada)
Aug. 13, 2020 (CBC News) - A judge in British Columbia has granted Northern Pulp creditor protection until the end of 2020 and approved an interim financing agreement that will see the mill receive $15 million from third-party lenders.
Justice Shelley Fitzpatrick delivered her decision Thursday [Aug. 6] in B.C Supreme Court via teleconference following two days of arguments.
The hearing was held in B.C. because that's where Northern Pulp's parent company (Paper Excellence Canada) is based.
The ruling means the mill, which was facing a cash crunch, now has the liquidity to get it to the end of the year as it works toward completing environmental cleanup work required by the Nova Scotia government at a site in Pictou County and works on a restructuring effort in hopes of eventually reopening the operation.
The mill has been shut down since the end of January, after failing to secure approval to build a new effluent treatment facility. Fitzpatrick ordered the monitor, Ernst & Young, to provide an update on the company's progress by October.
The third-party financing is being provided by Pacific Harbour North American Resources and Paper Excellence Canada, the mill's parent company. They are splitting the financing 80-20, respectively.
The mill was originally seeking a financing arrangement worth $50 million. However, that was reduced to an initial instalment of $15 million in the face of opposition by the provincial government and other parties. Lawyers for the mill will have to return to court to apply to access further capital and be able to prove the company has made meaningful progress toward restructuring and environmental cleanup requirements.
The complete article is avaialble on CBC's website: www.cbc.ca/news/canada/nova-scotia/northern-pulp-boat-harbour-court-creditor-protection-1.5677445.
SOURCE: CBC News