Catalyst Paper announces successful end to Recapitalization agenda

SPOKANE (Scrap Monster): Catalyst Paper Corporation has announced that its recapitalization and privatization plan has come to a successful end. The press release issued by the company states that the plan has been implemented successfully and that they are already in effect. It must be noted that the Supreme Court of British Colombia had given final nod to the plan last week. The recapitalization process had begun during the month of October last year.

According to company press release, its 11% PIK Toggle Senior Secured Notes have been exchanged into each holder of Notes’ pro rata share of a new US$141,924,958 secured term loan and pro rata share of new common shares of Catalyst. The company expects the payable amount in connection with the privatization transaction to total around CAD$ 2.2 million in the aggregate.

Also, all Common Shares outstanding immediately prior to the Recapitalization, other than the Common shares held by certain supporting parties, have been repurchased for cancellation for cash consideration equal to C$0.50 per Common Share. Incidentally, the Common Shares of the company were earlier delisted from the Toronto Stock Exchange (TSX). The company will now file a certification under Form 15 which in turn will terminate the registration of its Common Shares and its reporting obligations with the US Securities and Exchange Commission. The company has ceased to be a reporting issuer in each of the Provinces of Canada under applicable Canadian securities law.

Further to the implementation of the recapitalization plan, the maturity dates of the existing revolving asset-based loan facility and the existing term loan facility have been extended until July 31, 2020. Moreover, the company is now owned by three major shareholders- Oaktree Capital Management, Mudrick Capital Management, L.P. and Cyrus Capital Partners, LP.

The completed plan will help the company to reduce its debt and increase the liquidity. It will help the company to improve its financial strength and act as a big relief for the company which has been struggling to keep pace with the fast changing market scenario. The recapitalization plan is estimated to extinguish nearly $125 million of the principal amount of its debt with minimal impact on any of its trade vendors or suppliers.

Earlier on January 17^th, Catalyst shareholders and noteholders had approved the plan by more than 90%. The special meeting of shareholders had authorized the revitalization plan resolution by 99.1% of the votes cast by Shareholders present in person or represented by proxy. The resolution authorizing the Privatization Transaction was approved by 98.6% of the votes cast by Shareholders present in person or represented by proxy. In addition the Noteholders had authorized the revitalization plan resolution by 100% votes cast by Noteholders.

The recapitalization process began after the deal to sell Catalyst Paper to India-based Kejriwal Group International (KGI) fell through. In July last year, KGI had entered into a support agreement with four principal securityholders- Mudrick Capital Management, L.P., Cyrus Capital Partners, LP, Oaktree Capital Management, LP and Stonehill Capital Management LLC who owns nearly 79% of the outstanding shares of the company. However, the transaction was not completed.

About Catalyst Paper

Catalyst Paper Corporation is a pulp and paper company based in the Canadian city of Richmond, British Columbia. It operates five pulp mills and paper mills, producing a combined 1.8 tonnes of paper and 500,000 tonnes of market pulp annually. 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. The company is also ranked by Corporate Knights magazine as one among the 50 Best Corporate Citizens in Canada.