Among unsecured general creditors, 99.4 per cent representing 99.9 per cent of the value of the claims voted in favour of the plan of arrangement. Among secured U.S. noteholders, 80 per cent voted in favour of the deal, representing 88 per cent of the value of their claims.
“With both classes of creditors having approved the plan of arrangement the plan is now approved and will be taken to court to be sanctioned by the court,” Mathew Harris of court-appointed monitor Ernst & Young said.
The next court appearance is set for Aug. 28, when NewPage will seek to have its creditor protection extended until Sept. 28.
Many of the creditors voted by proxy ahead of the meetings and did not attend. The separate meetings for the two creditor classes wrapped up quickly.
Creditors agreed to give up their claims against the company in return for pennies on the dollar.
The mill has been in creditor protection and in an indefinite shutdown since last September, throwing hundreds of people who relied on the region’s largest employer out of work.
The full price that Pacific West Commercial Corp. has bid for the mill is $33.5 million. Of that, $31 million will go to U.S. noteholders, with the general unsecured creditor class sharing the remainder.
The underfunded NewPage pension plans will receive about $1.5 million.
There are three remaining hurdles that Pacific West must overcome in order to reopen the mill — an advanced tax ruling from Canada Revenue Agency, a Utility and Review Board ruling on a reduced power rate, and a deal with the province over access to Crown land.
Pacific West only intends to restart the mill’s newer supercalendered paper machine.
Pacific West restructuring manager Marc Dube said the company’s original plan was to restart the mill at the beginning of September to take advantage of an important season for ordering paper.
“The process is going to take a little longer than that but we’re going to start it as quickly as we can,” he said. “We would prefer to start earlier. We’ve been in communication with our customers and they understand fully what we’re trying to do and they’re supporting us.”
It takes 10 days to go from the current hot-idle mode into production of paper.
Dube said it’s unknown when Canada Revenue Agency or the UARB will issue their decisions.
“We are only working forward in a positive manner at this point and we’re not talking about walking away,” Dube said.
Archie MacLachlan, first vice-president of Communications, Energy and Paperworkers 972, called the creditors’ votes a step in the right direction to getting the mill reopened.
Had the creditors not approved the plan, the mill’s assets would have been liquidated.
“It’s been a hard year and it’s not over yet, but patience and perseverance, as they say,” he said.
Mill workers remain apprehensive having seen so many delays in the long process, and some are nearing the end of their employment insurance benefits, MacLachlan said.
A&A Touesnard Trucking, owned by George Touesnard of River Bourgeois, was owed about $12,800 by NewPage when the mill shut down. He voted in favour of the plan.
“The company needs to move forward now, and stopping the process isn’t going to do anybody any good,” he said. “It’s time to move forward and try to get everybody back to work.”
Since NewPage shut down, his company has been relying on highway work and small construction jobs to get by, he said, adding it’s been a difficult 11 months.
NewPage retiree Bill MacInnis attended the general creditors meeting, saying he wanted to try to understand what was taking place.
“It’s been a long, drawn-out process but I guess they have to go through that to get from A to Z,” he said.
Two months ago he saw his pension income cut by 28 per cent and is anticipating a cut in his benefits at the end of August. His wife, an adult education teacher who works on contract, is without a defined benefit pension plan.
“It’s an adjustment to a lifestyle … you’re more careful in what you’re spending and how you’re living.”
A reopened mill would offer total employment of more than 800, including woodlands operations, Dube said. Inside the mill, there would be 229 unionized workers, a reduction of more than half.
“We won’t restart it unless we’re completely confident that it’s going to be here for a long, long time,” he said.
Cape Breton Post