December 15, 2011
UPDATE ON CONTINUING DISCUSSIONS WITH CATALYST PAPER
As reported in the last update on December 13th, discussions between Catalyst Paper, CEP Local Unions and legal counsels concerning CCAA / Bankruptcy process, restructuring of the bondholder debt and possible outcomes have been ongoing over the past three days.
During this period an Independent Forensic Accountant has been reviewing the financial records of the employer to determine the accuracy of their reports to the local unions and this morning will be reporting back to the Locals. In preliminary discussions, he has reported that all the information and data substantiates Catalyst’s information that it requires immediate relief from the bondholders in the form of a reduction in the bond debt and therefore the interest payments that are associated to it.
As indicated in the press release this morning from Catalyst, they are deferring payment on the $21 million US dollar interest payment due on December 15, 2011 and will be taking advantage of the thirty (30) day grace period and delayed interest payment in a move to restructure their bond debt.
Catalyst has assured the Local Unions in a meeting held last evening that the mills will continue to operate during the deferral period in a manner that will see them meet the delivery of the product to their customers and this action will not impact our members’ day-to - day lives.
The Local Unions’ will continue to meet today to discuss the options that are available to them up to and including entering into early negotiations for a renewal of the 2008 – 2012 Labour Agreement. Entering into these discussions is made with the undertaking that any agreement would be contingent upon an agreement being reached with the bondholders to reduce Catalyst’s debt and a standard agreement being reached throughout the three mills.
As was stated by the Catalyst Locals on the conference call – once they enter into the process of bargaining a renewed collective agreement, they will forward a letter stating they are withdrawing from caucus.