N.S. opposes Northern Pulp $50M interim financing bailout deal
The provincial government of Nova Scotia is opposing a bailout deal that would see Northern Pulp receive $50 million from its parent companies, Paper Excellence and Pacific Harbor North American Resources Ltd. The loan would allow Northern Pulp to continue to pay severance to the 280 employees laid off since their closure and more than 200 forestry contractors, landowners and service providers. It would also help Northern Pulp pay its share of the costs of Boat Harbour’s shutdown and clean-up, idle its kraft pulp mill and work toward approval for a new effluent treatment plant from environmental officials.
Northern Pulp claims that without this loan, the company will run out of money in August, reports The Telegram.
The loan – if approved – will be given in installments, but there are certain conditions. According to the terms of the loan, by 2022, Northern Pulp would need approval from the province’s environment department for a new replacement effluent treatment plant , and the province would have to agree to co-fund its design and construction. The Nova Scotia government would also have to agree to pay lost profits and damages incurred while the pulp mill was idle, through a court order or negotiated settlement.
Since the proposed loan is part of creditor protection proceedings in B.C., the Nova Scotia government is not commenting on the deal or its attempts to block it.
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