Catalyst Paper goes dark

Publicly traded pulp and paper company goes private, wipes out $125 million in debt

Catalyst's paper mill in Crofton on Vancouver Island is one of three mills that Catalyst owns in B.C. | Handout

Catalyst Paper has gone dark. The B.C. paper company announced Friday, January 27, that it is no longer a publicly traded company.

Following recapitalization with its three major shareholders, the company – which formally was listed under the stock symbol CYT – is now privately owned by three major shareholders: Oaktree Capital Management, Mudrick Capital Management, L.P. and Cyrus Capital Partners, LP.

The move will take $125 million in debt off the company’s books.

“About $125 million of debt is being extinguished without any adverse effect on trade vendors and suppliers,” Len Posyniak, Catalyst’s senior vice president of human resources and corporate service, told Business in Vancouver. “That’s very key to the whole matter.”

Close to 80% of Catalyst’s stock had been owned by its major shareholders, which have bought out the company's other common stock holders.
 
Under the new arrangement, the three stakeholders are exchanging Catalyst’s secured notes for new common shares and a $141 million secured term loan.
 
Catalyst owns three paper mills in B.C. – Crofton, Powell River and Port Alberni. It also owns mills in the U.S. It employs 1,600 people in B.C.
 
The recent move to go private follows a failed acquisition last year by India’s Kejriwal Group International. News of that deal sent Catalyst’s stock up 700% in May 2016, from $0.59 a share to $5, but the deal later fell through.
 
In 2012, Catalyst faced bankruptcy and was forced into creditor protection and forced to sell off some of its assets. Two years after that near-death experience, Catalyst bought two paper mills in the U.S. for US$74 million.
 
nbennett@biv.com