TORONTO, May 24 (Reuters) - Catalyst Paper Corp, a Canadian paper and pulp producer under creditor protection, will attempt to sell its assets after a proposed restructuring plan failed to win the backing of its unsecured lenders.
The plan won overwhelming support from its secured lenders, but fell slightly short of the two-thirds backing it needed from unsecured lenders, the Richmond, British Columbia-based company said.
“Since the amended plan of arrangement was not approved at the meetings, Catalyst Paper is required to commence a sale transaction,” the company said in a statement late on Wednesday.
The company was granted creditor protection in January, as it attempted to restructure its business.
It is one of many paper producers that has recently succumbed to higher costs and waning demand, as banks, utility companies and media companies focus more closely on online services and cut paper use.
Catalyst, which had secured a roughly $175 million debtor-in-possession financing package from JPMorgan, said it still has access to the loan, which along with its operating revenues will provide enough liquidity for it to meet its obligations.