Creditor protection extended for NewPage
A judge has given a shuttered Cape Breton paper mill an extension of its protection from creditors.
The creditor protection for the NewPage Port Hawkesbury mill in Point Tupper, N.S., has been extended from Dec. 9 until Jan. 20.
In court documents arguing for the extension, the paper mill argued it has made progress on a sale of assets and that an extension would give it a reasonable opportunity to conclude that process.
On Tuesday, the Nova Scotia Utility and Review Board granted a three-year electricity discount to both the NewPage mill and Bowater Mersey Paper Co.
The discount and the proposed extension helps keep the hope alive that the NewPage mill will restart.
"I think it is favourable. I think it's better today than it was yesterday," said Matthew Harris, a spokesman for the court-appointed Ernst & Young monitor handling the sale of the mill.
The mill was shut down in September after struggling with soaring fuel and electricity costs, a strong Canadian dollar and declining demand. It lost US$50 million over the last year, according to an affidavit NewPage filed with the court.
About 1,000 people were left without work when the operation closed, and since then Ernst & Young has whittled a list of potential buyers to four.
"Let's all work together and hope that the unions, the fibre, the province can still step forward and like the power corp did today, and the UARB," said Port Hawkesbury Mayor Bill Joe MacLean.
"I assume they are doing their own due dilligence about 'Can they operate?' and the fact the UARB hearings have reported back would be an important part to of their consideration," said Archie MacLachlan for the Communications, Energy and Paperworkers Union of Canada.
The union identified a second bidder for the mill, Alberta Newsprint Co., but CBC News was unable to confirm that.
Paper Excellence, a potential operator for the shuttered NewPage mill, says it's too early to determine the ruling's impact.
"Paper Excellence is going through their due diligence process with regards to NewPage Port Hawkesbury as established by the monitor and will review this ruling as part of that process. It is too early in the process to determine impact," said Don Breen, vice-president of Northern Pull mill, which Paper Excellence purchased last spring.
"The Pictou mill is basically self-sufficient when it comes to electricity consumption, therefore this ruling has minimum impact on our Pictou County operation," he said in an email to CBC News.
With files from The Canadian Press