November 15, 2011 / 4:54 PM / in 7 years

Catalyst Paper shares fall on debt concerns

Nov 15 (Reuters) - Catalyst Paper Corp’s shares lost a fifth of their value on Tuesday, a day after it reported a quarterly loss on an impairment charge at a mill and warned its high debt level could hit results and operations.

On Monday, the paper company said in a statement that its capital structure was too highly leveraged and it was looking at “appropriate capital restructuring improvements.”

Its long-term debt had risen 7 percent to C$840.1 million at the end of September, from December last year. Its market capitalization was about C$29 million as of Monday.

“The issue with the company is that it has adequate liquidity, but has significant amount of debt. We need to see how the company’s current structure handles it,” RBC Capital analyst Paul Quin told Reuters.

Catalyst, which makes specialty printing papers, newsprint and pulp for customers including retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe, has been hit by a weak print advertising market.

Catalyst shares were trading at 6.5 Canadian cent in late morning trade on the Toronto Stock Exchange. They earlier touched a low of 6 Canadian cents. (Reporting by Arnav Das Sharma in Bangalore; Editing by Sriraj Kalluvila)

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