Fraser may spin off Madawaska mill
Officials of Fraser Papers are contemplating spinning off its specialty papermaking operation in Madawaska and Edmundston, N.B., into its own company as the Toronto-based corporation moves through creditor protection proceedings.
The plan is outlined in an affidavit Fraser filed in an Ontario court seeking an extension of creditor protection through Dec. 4, according to the Telegraph-Journal of New Brunswick. "The success and viability of this process depends in large part on the ability of the applicants to improve and then stabilize the core specialty papers business in Edmundston ... and Madawaska, Maine, as a standalone business in the very near term, while continuing to negotiate and implement restructuring solutions for the other facilities and assets over the longer term," CEO Peter Gordon states in the affidavit.
Gordon told the paper key components of this strategy are agreeing on a new labor contract and pension liability issues at the Maine mill, and pursuing a better deal with utility NB Power on the electricity Fraser provides from its co-generation plant. If those issues are resolved, Gordon said the company intends to propose a restructuring plan to its creditors by the end of November.
Fraser filed for bankruptcy protection in June after struggling with a soaring Canadian dollar, increased global competition and increasing energy and labor costs.
Go to the article from the Telegraph-Journal >>
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