Howe Sound Pulp and Paper Limited Partnership (HSPP) has reached agreement this week with five of its six participating lenders with respect to a restructuring of Howe Sound's long-term debt. According to HSPP, those five institutions hold approximately 88 per cent of the long-term debt. However, one lender has not agreed to sign the debt restructuring agreements. As a result, HSPP filed a proceeding under the Companies' Creditors Arrangement Act (CCAA) on Tuesday morning to have the restructuring, which has already been approved by five of the six lenders, apply to the sixth lender as well. According to HSPP manager of environment and external relations Al Strang, the plan of arrangement that has been filed with the court seeks only to reorganize the long-term debt and in no way seeks to compromise the claims of other creditors."Creditors are stayed, but only to protect payment of their accounts in the normal course of business and to ensure that all creditors are treated fairly," said Strang. "All supplier accounts will be paid in full, dollar for dollar, in the normal course of business. According to Strang, all six lenders, including the dissenting lender, have consented to an expedited process, which is expected to be concluded today (Friday, Feb. 1). Completion of the restructuring plan will be on Feb. 5. "Howe Sound is and will be conducting business as usual with no interruption of any kind," said Strang. "The CCAA proceeding will have no effect whatsoever on the employees or their ongoing employment. All customers can expect full and normal deliveries and service. Production, shipment and maintenance schedules will continue as normal. All trade suppliers will be paid in full as their standard invoice terms come due for invoices issued prior to, during and following the period of the CCAA proceeding. "Howe Sound has positive cash flow, and interest and trade accounts payable are current."
