Catalyst Paper Corporation (TSX:CYT) (“Catalyst” or the “Company”) announced today that it has obtained an interim order of the Supreme Court of British Columbia with respect to the recapitalization plan announced on October 26, 2016 (the “Recapitalization”).
Pursuant to the interim order, the meetings of the holders of common shares of Catalyst (the “Shareholders”) and the holders (the “Noteholders”) of PIK Toggle Senior Secured Notes due 2017 (the “Notes”) will be held on January 17, 2017. The record date for the determination of the Shareholders and the Noteholders entitled to vote at the meetings is the close of business on December 9, 2016.
The Recapitalization contemplates a plan of arrangement pursuant to which the Notes and all accrued and unpaid interest in respect of the Notes up to November 1, 2016 would be exchanged for:
(i) a new secured term loan in the principal amount of US$135 million, plus accrued and unpaid interest on the Notes from November 1, 2016 to but excluding the effective date of the Recapitalization (the “Effective Date”), which will mature five years from the Effective Date (the “New Secured Term Loan”); and
(ii) common shares of Catalyst (the “Common Shares”) representing approximately 95% of the outstanding Common Shares after giving effect to the Recapitalization.
The rights of Catalyst’s trade vendors and other suppliers would not be affected under the terms of the Recapitalization.
In connection with the Recapitalization, the minority shareholders of Catalyst will have an opportunity to vote on a transaction pursuant to which all existing Common Shares outstanding before the Recapitalization, other than the common shares held by parties to the Recapitalization Support Agreement entered into on October 30, 2016, would be repurchased for cancellation by Catalyst for cash consideration equal to C$0.50 per Common Share (the “Privatization Transaction”). Total consideration payable by Catalyst in connection with the Privatization Transaction would be approximately C$2.2 million in the aggregate.
The Privatization Transaction is subject to approval by the minority shareholders of Catalyst pursuant to a vote separate from the vote with respect to the Recapitalization. Completion of the Recapitalization is not conditioned upon approval by the minority shareholders of the Privatization Transaction.
Completion of the Privatization Transaction is however conditioned upon receipt of discretionary exemptive orders from the Canadian securities regulatory authorities to the effect that Catalyst would cease to be a reporting issuer following the completion of such Privatization Transaction.
Support Agreements with Securityholders
On October 30, 2016, certain funds and entities managed or controlled by Oaktree Capital Management, L.P., Mudrick Capital Management, L.P. and Cyrus Capital Partners, L.P. (collectively, the “Supporting Parties”) and the Company entered into a support agreement (as amended, the “Recapitalization Support Agreement”), pursuant to which the Supporting Parties undertook to vote Common Shares representing approximately 70% of the issued and outstanding Common Shares and Notes representing approximately 87% of the outstanding Notes in favor of the Recapitalization and the Privatization Transaction.
more at: http://www.catalystpaper.com/media/news/corporate/catalyst-paper-obtains-interim-court-order-recapitalization-and-commitment