By: E&P Staff
A Quebec court has approved the sale of White Birch Paper Co., and a U.S. court was to rule on the sale today, Sept. 30.
North America’s second-largest newsprint producer, White Birch operates three mills in Quebec and one in Virginia.
The company was sold at auction last week for $236 million, or roughly a third of what Peter Brant’s group paid for its mills almost 10 years ago. The new owners, however, are looking at debt exceeding $650 million.
Winning bidder BD White Birch, a group led by funds managed by Black Diamond Capital Management bid $94.5 million in cash; rival bidder Sixth Avenue Investment Co. offered $175 in cash. Their offers, however, differ in debt and assumption of liabilities regarding certain classes of creditors and the individual mills, according to a report by The Ottawa Citizen‘s Bert Hill.
For example, the deal calls for payment of employee claims but only a tiny slice of obligations to pension plans and unsecured lenders.
The deal’s final hurdle will be negotiation of new contracts with Canada’s Communications, Energy and Paperworks Union. The new owners seek to end millworkers’ defined-benefit pensions.