A judge in British Columbia has granted Northern Pulp creditor protection until the end of 2020 and approved an interim financing agreement that will see the mill receive $15 million from third-party lenders. Justice Shelley Fitzpatrick delivered her decision Thursday in B.C Supreme Court via teleconference following two days of arguments. The ruling means the mill, which was facing a cash crunch, now has the liquidity to get it to the end of the year as it works toward completing environmental cleanup work required by the Nova Scotia government at a site in Pictou County and works on a restructuring effort in hopes of eventually reopening the operation.
Ahlstrom-Munksjö is exploring strategic options for its Decor business, including the possibility of divesting the business. The review process, first announced on September 17, 2019, has been impacted by the Covid-19 outbreak.
In 2020, the Decor business saw strong customer demand with tailwinds from increased consumer spending on furniture and domestic refurbishments as a consequence of structural changes related to working from home accelerated by the Covid-19 pandemic. For the full year, comparable EBITDA increased, partly driven by higher raw material efficiency, and reached 14% of sales in the fourth quarter.
In the past months, Ahlstrom-Munksjö has progressed with the carve-out of Decor with the objective of enabling the business to operate as a stand-alone entity. Decor has also been discussing opportunities for partnering with leading Chinese suppliers to create a more global leader with strong presence in Europe, South America and Asia.
As the acquisition of Ahlstrom-Munksjö by the Bain Capital-led consortium has now been completed and the carve-out activity and dialogue with potential partners in China is progressing, Ahlstrom-Munksjö is reactivating the process to identify the interest of capital investment in the Decor business and find the best path to develop Decor’s full potential.
“With the aim to strengthen our platform of businesses, Ahlstrom-Munksjö regularly assesses what is the best structure of its businesses. Our goal remains to accelerate the development of Decor into a stand-alone market leader, and we are open to the possibility that a new owner, fully focused on this business, may be best positioned to accomplish such an objective. New capital will also allow further investments to enhance Decor’s operating performance and enable expansion through acquisitions and mergers in China”, says President and CEO Hans Sohlström.
“Whilst Decor is a great business with strong potential for global development, we are fully supportive of Ahlstrom-Munksjö’s strategy of focusing management’s effort in the other four business areas of the company which we expect to demand significant resources to consolidate and expand leadership in their respective end markets”, says Chairman Ivano Sessa.