Catalyst Paper Corp. (TSX:CTL) will file for creditor protection, the company announced this morning.
Yesterday, the company expressed disappointment with a January 29 union vote against a collective agreement, which had jeopardized the company’s ability to proceed with a planned recapitalization transaction. (See “Union vote threatens Catalyst’s recapitalization plan” – BIV Business Today, January 30.)
In this morning’s announcement, Catalyst stated that filing for creditor protection will allow “an orderly restructuring” of the company’s business and operations.
“Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks,” Kevin Clark, Catalyst president and CEO, said in the statement. “Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined.”
Clark said that, after reviewing the situation, Catalyst saw creditor protection as the best course of action for the company.
“The board, management and our advisers believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure necessary to put our company on firm financial and competitive footing.”
Jenny Wagler
@JennyWagler_BIV