Powell River residents and current and pensioned mill employees are waiting to hear the fate of the town's largest employer as Catalyst Paper Corporation seeks a $395 million restructuring plan. Catalyst has been under Companies' Creditors Arrangement Act (CCAA) creditor protection since late January.
Catalyst, whose restructuring plan faced a creditor vote in late April, has already shut down its pulp mill in Campbell River and is seeking court approval to sell its remaining B.C. mills in Powell River and Crofton to the highest bidder, if the restructuring plan fails. Retired salaried employees of Catalyst stand to lose a substantial portion of their pensions if the company's plan fails.
The company and its noteholders have put forward a sales and investor solicitation process, which includes a "stalking horse bid", rumoured to from a bond holder. This means the noteholders are prepared to bid to become the new owners - and sellers - of the company.
"All of us hope very strongly that Catalyst management is able to sail through this creditor protection and continue their operations," said Jim Donnelly, who was the investment recovery manager at the Powell River division before he retired in 2007. "If they do, then this is not a problem to any of us."
If the company doesn't sail through, however, Donnelly added, "Our pensions are at risk." There are 1,000 to 1,100 salaried Catalyst pensioners affected, including about 200 in Powell River.
Concerns about Catalyst's future have affected the housing market, confirmed Warren Behan, a veteran Powell River realtor. "Prices have been falling now for four years," he said. As an example, he pointed to a current Coast Realty listing of an ocean view home in the Westview area, priced at $225,000. "You can buy waterfront homes here for less than $500,000," he said, "there are terrific bargains."
