Another B.C. sawmill company has filed for creditor protection and is planning a restructuring, underscoring the critical state of B.C.’s forest sector.
The San Group, based in Langley, has received creditor protection under the Companies' Creditors Arrangement Act, as it undertakes a restructuring. Deloitte Restructuring Inc. has been appointed the company’s monitor.
Earlier this year, another B.C. company, Teal Jones, also filed for creditor protection.
San Group owns sawmills and a specialty mill in Port Alberni, and a remanufacturing facility in Langley.
In 2022, San Group announced the acquisition of Acorn Forest Products in Delta from Interfor (TSX:IFP). In April this year, the Acorn Forest Products mill was shut down when it was damaged by fire.
According to documents filed with Deloitte Restructuring, Acorn Forest Products owes the Vancouver Port Authority $1.9 million in rent.
Interfor was informed of the arrears by the Port Authority. Interfor says it was unaware that the rent had not been paid and is seeking indemnification for any rent still owing on its former property.
Under court ordered creditor protection, San Group will remain “in possession and control of their current and future asset” and can carry on their business “in the ordinary course and in a manner consistent with the preservation of the business and the property.”
The company may also “permanently or temporarily cease, downsize or shut down all or any part of the business or operations and commence marketing efforts in respect of any of their redundant or non-material assets,” and can “terminate the employment of such of their employees or temporarily lay off such employees as they deem appropriate” while pursuing refinancing.
In addition to the fire that shut down its Acorn Forest Products mill, San Group has struggled to keep other mills operating, due to an unreliable supply of logs.
As the Times-Colonist has reported, in October the company announced it was temporarily shutting down its large-log sawmill and value-added manufacturing plant in Port Alberni, due to a shortage of logs.
Also in October, liens were placed on the company's Port Alberni sawmill lands as security for nearly $22 million owed to the province in stumpage fees.
BIV has reached out to San Group for comment.
-- with files from Carla Wilson, Victoria Times-Colonist
