From front Repap future While Avenor is arranging for a $600 million bank Jine of credil to provide short term financing for its acquilision, it has done a separate deal aimed at Repap’s northwestern operalions, That involves new bank lines of credit of $342.5 million and sales of Avenor stock and debentures worth $210 mil- lion to two banks. There is also speculation Avenor might [old in Repap’s northwest holdings with those belonging Pacific Forest Products on Vancouver Island and create a larger corporate unit. While Repap is acknowledged in the pulp and paper in- dustry as having world class assets, its Skeena pulp mill is’ regarded as a problem, “There’s been uniform praise for the quality of the as- sets, except for that Skeena mill,’’ says Jim Slattery of the investment firm of Ernst and Young in Toronto. The age of the mill combined with low pulp prices, scarce fibre supplics and high costs would combine to make difficult any plan by Avenor to sell Repap’s north- westem assets, he said. “There were companies looking at Repap on a piece meal basis and they looked at Skeena as well and I'm sure there may not have been too many takers for it,’” Slattery added of Repap’s search for a buyer earlier this year. Petty expected to do just fine GEORGE PETTY stands to become the single largest shareholder in Avenor Inc. should its deal to take over Repap go ahead. The founder and chief ex- ecutive officer of Repap now owns 29 million shares in the company, enough for 23 per cent of all outstand- ing shares. Given that 4.25 Repap shares are worth one Avenor s2hare as part of the takeover, Petty will end up owning 6.7 million Avenor shares. That'll be just over 10 per cent of Avenor, should the deal go through, and make him its largest shareholder, Avenor’s shares were listed at $21.20 when the Your Gateway to tha www. yellowhead46.net * Internet Training ¢ Web Site Design ¢ Web Site Hosting ee | * Free Personal Web Page with all Accounts ¢ Computer Sales And Service a Pa ae . ot fee pest oe af at j A. ee whe *. U wN & " an ny fa, 7 in cf I aN a ‘ os sa Tas oe YEA ‘peste hag Fh ' im puter Solutions Your Solution People : Your DIGITAL gateway to the INTERNET! Offering a full range of Internet access with flexible access plans. | _ Local service in Terrace and Kitimat with no long distance charges Come in and see our Christmas Computer Digital Camera Specials Sign up and access for December is free. Your name will be automatically entered into our draw held on December 31, 1996 at 4 pm. Sign up for a month ora year and you could WIN the equiv- | alent of your internet purchase, or an HP 680C colour printer. - UPLINK P Reaponse .+ DPC Network =" Operalions Cunter Purchase a DirecPC satellite for high speed access 4613-A Lakelse Avenue, Terrace, BC V8G 1P9 Office 635-7606 Fax 635-7642 deal was announced Dec. 18, meaning Petty’s hold- ings would have been worth more than $142 miltion. But that value took a bit of a beating last week when Avenot's share price dipped below the $20 mark. Petty has been offered and has accepted a seat on ~ Avenor's board of directors. Repap is very much _ Petty’s company as he founded the enterprise piece ’ by plece. His specialty was in taking kraft and paper mills no- body else wanted at bargain basement prices and then turning them around. But that process of con- vering old properties into modem operations also re- quired a lot of borrowed money and eventually that: borrowing caught up with Repap. It resulted in heavy debt loads which Repap couldn’t sustain, particularly in a volatile pulp and paper market which feajures huge - inereases and decreases in Als pricing cycles. George Petty Over time Petty’s holdings in Repap diminished as in- stitutions and banks began to exert more control as a Tesult of the mounting debt, . Woad Montreal-based Gundy investment analyst Herve Carreau described Petty as one of the last Major entrepreneurs in the forest products business. ‘There are sti}] some en- trepreneurs around but they are with smaller companies than this one,’’ he said. Another analyst, Ross Healy of Solvency Analysis Corporation of Toronto, says Petty managed to deliver his company whole and intact to another owner without having it broken up because of a debi load that exceeded $2 billion. “My feeling is that George Petty after years of struggling may have simply given up,’ said Healy. Petty was born in 1933 in Montreal and has a Bachelor of Commerce and a Masters of Business Administration. Company rooted in our history YOU'LL HAVE to dig out a textbook on Canadian history ‘and turn to the last century to find out more about the com- pany that wants to take over Repap. Avenor, headquartered in Montreal, was once Canadian Pacific Forest Products, an arm of the Canadian Pacific enipire. And Canadian Pacific began life as Canadian Pacific Railways, the company which built a railway across the northern balf of North America which cemented the young country of Canada. Canadian Pacific Railways received massive land grants as part of the arrangement with Canada’s first government led by Sir John A. MacDonald. Those land grants were parlayed info a vast array of holdings which included real estate developments, ship- ping lines and eventually an airline. Completion of the railroad to the west coast Was also a condition of British Columbia joining Confederation. Avenor was spun off three years ago from its parent Ca- tiadian Pacific to be a stand alone forest products compa- ny. The “tayve’’ in Avenor is Latin for ‘‘going forward’’ and the ‘nor’? is a shortened version of the word ‘‘north,”” Avenor has substanial holdings in B.C., New Brunswick, Quebec, Ontario and Washington State. Its B.C. operations include a kraft pulp mill at Gold River on Vancouver Island and sawmills, through a 53 per cent siake in Pacific Forest Products, at Tahsis, Ladysmith and Nanaimo. There is some irony in this in that Repap founder and “chairman George Petty’s father was a railway clerk in Montreal. He worked for Canadian Pacific Railway. - your purchase price. Oller lalague purchases: Oltar hehe ne cn SEARS Expect more from Sears 3228 Kalum St. SEARS * Terrace, B.C. 635-6541 AUTHORIZED DEALER STORE S tal . fax 635-4302 nowy Owl Retail Ltd Authorized dealer 12950 Copyright 1996, Sears Canada Inc. _ Monday - Saturday 9:30 p.m. - 5:30 p.m. Closed New Years Day.