NewPage granted creditor protection extension until sale deadline
Posted Jul 18, 2012 05:05:55 AM.
This article is more than 5 years old.
The embattled NewPage paper mill in Port Hawkesbury has received an extension of creditor protection as regulatory hearings continue on a proposal to grant the new owners reduced power rates.
A Nova Scotia Supreme Court judge has granted the Port Hawkesbury mill an extension until Aug. 31.
The court-appointed monitor handling the sale says the extension gives creditors time to vote on whether to accept a proposal on what they’re owed, which will take place next month.
“It’s anticipated that if so many creditors vote in favour of the plan that Pacific West will take over the shares and pay the $33 million before Aug. 31. So the extension just allows that to happen,” Mathew Harris of Ernst & Young told the Canadian Press.
The deadline coincides with a proposed sale of the operation to Vancouver-based Pacific West Commercial, which hinges on the potential owner getting a deal on power rates.
Nova Scotia Power officials told the Utility and Review Board hearing Tuesday that the deal will benefit ratepayers.
The Chronicle Herald reports NSP president and CEO Rob Bennett said that after six months of negotiations, the two sides have come to an agreement on a discount power rate that is “fair and practical.”
Port Hawkesbury Mayor Bill Joe MacLean tells News 95.7 that if the deal isn’t approved and the sale falls through, 7000 people will be affected.
“We’re very hopeful that there will be an approval,” said MacLean. “The community, the Strait region, the province, everybody seems to be behind this, except for one guy, the consumer advocate, who seems to be getting a lot of press.”
The load retention mechanism is designed to make sure all of the incremental costs serving the mill load are covered by the rate.
Consumer advocate Bill Mahody has raised the concern that because the special rate includes cross-subsidization from other customers, there’s room for the possibility that residential power rates will increase.
Callers to News 95.7 are also raising concerns.
“Most of the people are against this deal,” John told the Rick Howe Show Tuesday. “We all know that us as taxpayers are going to end up supporting this deal. There’s no market for the product. Take that money, retire the men and women. It would be cheaper.”
