An Indian-based paper company is considering the purchase of Catalyst Paper, the company that owns the pulp and paper mill in Crofton.
In a statement, Catalyst said it has received an expression of intent outlining the terms of the potential acquisition from Kejriwal Group International and the four principal stakeholders in Catalyst — bondholders who also own 79 per cent of shares in the B.C.-based company.
The four stakeholders are Mudrick Capital Management LP, Cyrus Capital Partners LP, Oaktree Capital Management LP, and Stonehill Management LLC.
Catalyst issued a statement on the proposed transaction this week, stating that the company’s board of directors is encouraged by Kejriwal’s tentative proposal.
But no timeline is given for the possible sale and Catalyst included a caution to investors in its statement.
“There can be no assurance that any definitive proposal will be made, that any agreement will be executed and on what terms, or that this or any other transaction will be approved or consummated,” Catalyst’s statement said.
It is unknown exactly what impacts the potential sale could have on the Crofton mill and its workers if it goes through.
The website for the Crofton mill states that almost 600 employees work there.
But shares in Catalyst jumped more than 700 per cent after the announcement was made.
As well as the mill in Crofton, Catalyst owns pulp and paper mills in Port Alberni and Powell River, as well as two mills in the U.S. at Biron, Wisconsin, and Rumford, Maine.
The major products from the Crofton mill include newsprint, directory paper and kraft pulp which is used to manufacture printing, writing and tissue paper.