| Court extends Northern Pulp creditor protection |
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NOVA SCOTIA (From news reports) -- Northern Pulp is safe from its creditors for another five months.
British Columbia Supreme Court justice Shelley Fitzpatrick has approved the company's motion to have creditor protection extended until April 31.
Northern Pulp estimates it has enough money left to run until June. After that it will have to seek permission from the the court and its creditors to draw again on a $50 million financing facility set up by its parent company, Paper Excellence.
The Nova Scotian taxpayer is its largest secured creditor - holding about $86 million in loans to five companies associated with the Pictou County Pulp Mill.
"The Province is generally satisfied with the improved level of communication between the Petitioners and the Province, and also with other interested parties," reads an affidavit filed with the Court on behalf of the provincial government before Friday's hearing.
"The Province has, however, recently expressed concerns to the Petitioners and the Monitor as to the pace of the Petitioners' efforts in relation to the environmental remediation of the Mill and the progress towards advancing a plan for a replacement effluent treatment facility, which will require approval following an environmental assessment."
That $50 million pot set up by Northern Pulp's parent company, upon which it has already drawn $15 million, comes with strings attached.
The money is being provided in the form of advances based upon the following milestones being reached by December 2022:
An environmental approval to build a replacement effluent treatment plant.
An agreement with the province to help fund its design and construction.
A court decision or negotiated settlement with the province paying lost profits and damages associated with the idling of the kraft pulp mill.
By next June, Northern Pulp's managers have to be able to prove to its parent companies that "there is no existing or anticipated matter, event or circumstance that would reasonably be expected to have material or adverse effect" on their ability to hit the aforementioned milestones by Dec. 2022.
If they don't, the loan could get pulled and Northern Pulp forced into bankruptcy.
The provincial government warned the court isn't holding its breath.
"As is apparent from the materials which have been filed, the Petitioners are significantly behind schedule in terms of their work programme," reads the province's affidavit.
"The Petitioners' materials note that they expect the pace to pick up significantly in early 2021. The Province hopes this will be the case."
Some 280 unionized employees at Pictou County pulp mill were laid off earlier this year as a result of Northern Pulp not being granted permission to continue using the Boat Harbour effluent treatment plant while it seeks permission for its proposed replacement.
The Pictou Landing First Nation has had to live with the pollution from Boat Harbour for half a century.
It, and a coalition of commercial fishermen and concerned citizens, also opposed the proposed replacement facility, which would have been built beside the mill on Abercrombie Point but drain into the Northumberland Strait at Caribou.
According to an affidavit filed by mill manager Bruce Chapman, Northern Pulp is preparing a revised plan for an effluent treatment facility that will address concerns raised by the community. Details of what that plan is have not yet been released.
However, the mill plans to seek some form of environmental review process with the province early in the New Year.
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