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Fraser Papers Inc
Toronto, Ontario, Canada, 14 July 2010 -– Fraser Papers Inc. today reported financial results for the first quarter ended 10 April 2010.

As a result of the sale of the company’s specialty papers assets to Twin Rivers Paper Company Inc. and the sale of the company’s pulp mill in Thurso, Québec, in April 2010, the company has classified its specialty papers business and Thurso pulp mill as “held for sale” as of 31 December 2009 and 10 April 2010. The operating results of these operations have been disclosed as “discontinued operations” in the statements of operations.

The company generated an EBITDA loss of CAD 0.8 million from continuing operations in the first quarter of 2010 compared to positive EBITDA of CAD 2.4 million in first quarter of 2009. Net loss for the first quarter amounted to CAD 13.1 million or CAD 0.26 per share compared to a loss of CAD 16.7 million or CAD 0.33 per share in the first quarter of 2009. During the first quarter of 2010, the company recorded an impairment charge related to its paper mill in Gorham, New Hampshire, USA, of CAD 7.5 million or CAD 0.15 per share.

Fraser Papers has filed its first quarter 2010 financial statements, including the related management discussion and analysis, on SEDAR at www.sedar.com. As a result, the company is now in compliance with its continuous disclosure obligations.

On 18 June 2009, citing continued operating losses, weak markets for its products, impending debt repayments, and significant pension funding obligations, the company and its subsidiaries filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in Canada and Chapter 15 of the U.S. Bankruptcy Code.

In December 2009, Fraser Papers submitted a restructuring proposal to the courts that has provided for an early exit from creditor protection for its core specialty papers business and should provide for the maximum recovery of value for creditors. The proposal involved a two-stage process that created a stand-alone business out of the company’s specialty papers assets to be followed by the subsequent divestiture of the remaining assets by way of separate transactions.

Proceeds from the sale of the specialty papers assets to Twin Rivers, plus additional proceeds from the sale of the remaining assets in Fraser Papers, will be used to settle the remaining secured claims against the company, before distributing any remaining proceeds to its unsecured creditors. The remaining assets include the paper mill in Gorham, and two lumbermills in northern Maine. The company completed the sale to Twin Rivers on 28 April, and the sale of the pulp mill in Thurso on 30 April 2010.

The ultimate recovery for the creditors of Fraser Papers, if any, will not be determined until a final determination of all the claims against the company and a distribution of the net proceeds.

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