Catalyst Paper, which is being hammered with American duties on paper exports, is selling its American assets.
The Richmond-headquartered company owns two paper mills in the U.S. – one in Maine and one in Wisconsin.
The company announced May 25 that it is selling the two mills to ND Paper LLC, a wholly owned subsidiary of Hong Kong-based Nine Dragons Paper for US$175 million.
“This transaction allows Catalyst to re-pay a significant portion of our debt and focus on our British Columbia operations,” Catalyst CEO Ned Dwyer said in a press release.
“We continue to pursue opportunities to improve the competitiveness of our company and our industry. We also continue to work with the provincial and federal governments in our defence against the unwarranted imposition of U.S. countervailing and anti-dumping duties.”
Catalyst owns three mills in B.C. – in Powell River, Port Alberni and Crofton. The mills employ 1,600 people in B.C.
Catalyst nearly went bankrupt several years ago. In 2012, it was forced into creditor protection, and in 2017, the company’s major shareholders assumed $125 million of debt, bought out minority shareholders and took the public company private.
In March, the U.S. Department of Commerce hit Canadian paper producers with anti-dumping and countervailing duties. Duties imposed on Catalyst total 28%.
Closer to home, Catalyst also faces rising costs in B.C. This year alone, it is being hit with a 3% increase in power (electricity being its single largest input) and a 16% increase in carbon taxes.