Catalyst Paper, owner of the Snowflake recycled newsprint mill, is seeking protection from its creditors.
On Jan. 31, an announcement on the firm’s website read in part, “To facilitate an orderly restructuring of its business and operations, the board of directors of the company has approved a filing for an initial order from the Supreme Court of British Columbia to commence proceedings under the Companies’ Creditors Arrangement Act. The terms and conditions of the restructuring plan have not yet been determined by the company.”
Catalyst posted net losses of $205.7 million for third quarter sales of $340.3 million for the third quarter of 2011, noting, “The net loss was largely due to a $151.0 million impairment charge on the company’s Snowflake facility.”
A full write-down of net book value of the building, machinery, equipment, and the cost of the parts inventory and materials is credited for the large impairment charge.
In a press release Catalyst President and CEO Kevin J. Clarke said that they have focused on safety, which helped reduce lost time injuries, but those improvements were overshadowed by the impairment charge.
In a press release dated Nov. 14, 2011, regarding the impairment charge at Snowflake, Clarke said that it “makes very clear the relentless pressures on our industry.”
Also contributing to the third quarter loss was the foreign exchange rate of the U.S. dollar.
The full report can be viewed at www.catalystpaper.com.
A call to the Snowflake plant for comment was not returned by press time.
