Terrace Bay Pulp has lost its funding provider

Terrace Bay Pulp has lost its funding provider of $40 million.

This is the latest dark cloud greying the company's delayed restart plan.

Terrace Bay Pulp does have a $25 million loan agreement with the province of Ontario, providing the company is able to arrange additional private financing.

Papers filed in Ontario's Superior Court of Justice last week say that Terrace Bay Pulp “is currently in discussions with an alternative funding provider (but) should Terrace Bay not be able to secure an operating loan, it is unlikely that it will be able to satisfy the conditions of a province (sic) loan agreement, nor be in a position to finance the restart of its mill operations.”

On June 28th, the creditors of Terrace Bay Pulp will be voting on a payment plan that would permit the company to exit from its creditor protection period. Creditors aren't expected to recoup more than 8% of their claims should the payment plan vote fail.

425 people were working at the mill when it was idled on February 23, 2009. If the mill is not able to restart, the estimated cost of removing its hazardous materials and doing an immediate environmental cleanup is estimated at $13 million.

Source:

Mill looks for new lender (The Chronicle Journal)