Relief as NewPage creditors, bondholders accept offer
New owners looking for a break on energy costs, tax issues
Both the creditors and the American bondholders of the former NewPage mill in Port Hawkesbury have voted overwhelmingly in favour of accepting the $33-million offer from Stern Partners' subsidiary Pacific West Commercial Corp. of B.C.
Of the 1,034 creditor votes, 1,028 were cast in favour of accepting the offer. NewPage's American bondholders voted 80 per cent in favour of accepting the offer Wednesday afternoon.
Pacific West has said it would like to open the mill next month. There are two things that would have to happen:
First, the new owner of the mill, Ron Stern has applied to receive a break on the cost of electricity from the Utility and Review Board. He has said that the deal is conditional on getting an energy discount.
Stern had requested an expedited decision by Wednesday, but a representative of the Utility and Review Board said a decision is not ready.
Second, the company wants help with some tax issues from Revenue Canada, a decision on that is expected sometime in September.
Parker Stone, president of the Strait Area Chamber of Commerce, said the community has a lot riding on Wednesday's vote.
"This vote is extremely important and it's really needed for the town of Port Hawkesbury to continue to grow, to progress forward. There's been a lot of job losses and we have to start replacing those jobs, and with getting about 800 jobs out of the pulp mill — that would be a start on the road to recovery," he said.
"Maybe some of the merchants will start rehiring, and things will move on."
Now that the deal has been accepted, creditors will get only a fraction of what they're owed.
About $31 million will go to American bondholders who were out close to $3 billion when NewPage folded.
The next priority is general unsecured creditors including municipalities owed property tax, mill employees and pensioners.
About 1,000 NewPage employees and pensioners will be eligible to share an estimated $2 million.
Port Hawkesbury Mayor Billy Joe MacLean says the sale is important to the region, but it's bittersweet.
"It's sort of a sad day for those that have trades…that are going to receive pennies for dollars in this settlement. But that's not the responsibility of Stern, it's from the old company and the courts."
The mill has been closed since September 2011.