Terrace Bay Pulp receives positive vote to continue with its payment plan

Terrace Bay Pulp received a nearly unanimous vote to continue with its plan to pay off creditors and move forward towards reopening the mill this summer.

165 of the company's 168 creditors voted in favour of the payment plan that would permit the company to exit from its creditor protection period. Creditors weren't expected to recoup more than 8% of their claims should the payment plan vote have failed.

A separate agreement has been reached between Terrace Bay Pulp and about two dozen logging contractors who are collectively owed about $9 million for logs and wood chips that were brought to the mill and its bush operations before it was idled in Feb. 23 2009. The loggers have settled their claims for 75 cents on the dollar.

A unnamed lender, who had committed to $40 million in funding, recently backed out of its deal to help the Terrace Bay Pulp mill restart. However, company spokesman Yves Fricot has said an agreement with another lender is very close to being finalized.

The company had earlier secured an additional $25-million loan from the Ontario government on the condition that it secure its own financing.

At this time, Terrace Bay Pulp hopes to be restarting by the end of July.

Read more:

Mill plan receives big boost (Chronicle Journal)