The sale of two mills in the United States on May 25 means Catalyst Paper Corporation has only its three Canadian pulp and paper mills producing product, including in Powell River.
Catalyst entered into an agreement with Hong Kong’s Nine Dragons Paper to sell its mills in Rumford, Maine, and Biron, Wisconsin, and the company’s US headquarters in Dayton, Ohio, for $175 million (US).
The company’s US operations were purchased in 2015 for $62.4 million (US).
“This transaction allows Catalyst to repay a significant portion of our debt and focus on our British Columbia operations,” said Catalyst president and chief executive officer Ned Dwyer in a company statement announcing the downsizing.
The company is headquartered in Richmond and has three mills remaining in operation at Crofton, Port Alberni and Powell River.
Catalyst is being pressured by United States Department of Commerce protectionist trade measuresthat target Canadian producers of uncoated groundwood paper. Catalyst’s BC mills are taking the biggest hit.
“We continue to pursue opportunities to improve the competitiveness of our company and our industry,” stated Dwyer. “We also continue to work with the provincial and federal governmentsin our defence against the unwarranted imposition of US countervailing and anti-dumping duties.”
The Nine Dragons Paper transaction is expected to close upon a favourable vote of Catalyst's shareholders at a meeting on June 11. The three major shareholders of the company, holding 87 per cent of outstanding shares, have agreed to vote in favour of the transaction, according to the statement.
