CP Acquisition named stalking horse bidder, to bid US$275M in possible sale of Catalyst Paper should the papermaker fail to reorganize by April 25; judge approves company's land sale in Washington

LOS ANGELES , April 9, 2012 () – A stalking-horse bidder controlled by first-lien noteholders was named in a possible sale of Catalyst Paper Corp., according to an April 1 monitor’s report, The Deal Pipeline reported on April 9.

CP Acquisition LLC was appointed to bid US$275 million for Catalyst Paper if the British Columbia-based producer of specialty paper and newsprint fails to reorganize by April 25, PricewaterhouseCoopers Inc. indicated in its report.

Approval of CP Acquisition as Catalyst Paper’s stalking-horse bidder, as well as the solicitation process, was approved in an order signed by British Columbia Supreme Court Justice Robert J. Sewell on March 23, reported The Deal Pipeline.

On April 4, Sewell signed an order approving the sale of two parcels of Catalyst Paper land, comprising 1,800 acres in Snohomish County, Washington, to U.S. Golden Eagle Farms LP for about $3.6 million.

The land, which had been a farm for poplar trees, has been for sale since 2008, The Deal Pipeline reported.

The sale of Catalyst Paper would close by July under the proposed sale and solicitation process, which calls for bids to be due in 14 days and an auction to be held in 73 days from the date of the company’s failure to obtain approval for its plan of arrangement under Canada's Companies' Creditors Arrangement Act (CCAA).

Third Avenue Management LLC is the largest equity holder in Catalyst Paper, with a 29% stake, and no other entity holds more than a 10% stake.

Invesco Canada Ltd. owns the majority of Catalyst Paper’s secured notes, reported The Deal Pipeline.

Catalyst Paper is the world’s largest producer of directory paper and the region’s only lightweight coated paper manufacturer, according to court documents. It has manufacturing facilities in British Columbia and in Arizona, with a combined production capacity of about 1.9 million tons per year.

In addition to filing for CCAA protection in Canada on Jan. 31, on March 5 Catalyst Paper was granted recognition of the CCAA proceeding under Chapter 15 bankruptcy in the U.S. to protect its U.S. assets while it restructures in Canada, The Deal Pipeline reported.

The primary source of this article is The Deal Pipeline, New York, New York, on April 9, 2012.

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