Northern Pulp seeks more time to determine its future in Nova Scotia
Northern Pulp, a company based in Nova Scotia, has recently filed for an extension of their creditor protection as they explore the possibility of a future for their operation in the province. The request for an extension, which is set to be reviewed in British Columbia Supreme Court on Friday, aims to prolong the stay of proceedings until July 18.
According to a spokesperson for the company, this additional time will be utilized to further prepare for a potential sale of their assets in case a new mill is not deemed feasible. Additionally, Northern Pulp will engage in discussions with various stakeholders and rights holders regarding the potential establishment of a new bioproducts hub in Liverpool. This hub could potentially involve the production of bleached softwood kraft pulp, as well as biogas and biochemicals for various products.
Recent court filings have raised doubts about the likelihood of such a scenario and whether it would involve Northern Pulp at all. An affidavit from Carlo Dal Monte, the vice-president of legacy assets for Northern Pulp’s parent company, Paper Excellence Canada, indicates that since March, the company has received expressions of interest in submitting bids for the mill’s assets. However, the previous stay extension did not allow sufficient time to determine if a stalking horse agreement was feasible.
A stalking horse bid is a pre-negotiated offer to purchase a company’s assets. Extending the stay of proceedings would maintain the current state of affairs while interested parties prepare and submit bids. If multiple bids are received, the parties would need to determine which bid should be presented to the court for consideration.
Natural Resources Minister Tory Rushton stated that the provincial government would not oppose the application for the extension. He emphasized the government’s interest in exploring new opportunities for the forestry sector and natural resources in Nova Scotia. The potential establishment of a new pulp mill could have long-term benefits for the sector and the provincial economy.
Approximately a year ago, Northern Pulp and the provincial government reached a settlement agreement that marked the end of legal disputes surrounding the operation of the pulp mill in Pictou County. The focus then shifted towards conducting a feasibility study to assess the viability of building a new operation in Queens County. However, the study revealed that a new bioproducts hub would require substantial funding and did not meet the required rate of profitability.
Premier Tim Houston expressed the importance of having a mill in Nova Scotia for the forestry sector. While he hopes for the realization of a new mill, he did not commit to providing additional government assistance beyond existing economic development measures. Opposition leaders have questioned the use of public funds for a new mill operation in Liverpool, emphasizing the need for a clear proposal, job creation potential, environmental safeguards, and overall benefit to taxpayers.
Northern Pulp’s operation in Pictou County ceased in 2020 due to the company’s inability to secure environmental approval for a new effluent treatment facility. The government had committed to restoring Boat Harbour, the former tidal estuary where the facility was located, for the neighboring Pictou Landing First Nation. The future of Northern Pulp and the potential establishment of a new bioproducts hub in Liverpool remain uncertain as the company navigates through its restructuring process.
