Company ponders $110 million in capital spending

Gov

HEART ! . Is ; ano store | address of the next of kin for card; and SPENDING AND loan the Toronto-Dominion Bank ments to unsecured creditors sidered self supporting in fOuNDANON oF | your name/address for tax receipt (Visa

Guarantees from taxpayers to Skeena Cellulose will

have climbed to nearly $230 pulp mill workers in Prince 1997. tions. Box 22

million by the end of this Rupert hold the remaining For the year ending March But the budget documents Terrace, B.C. V8G 4A2.

fiscal year, indicate provin- 20 per cent, 31, the operating line guar- also warn that ‘‘future ‘ane f .

clal budget documents, For 1997-1998, the first antee increased to $52.9 profitability is uncertain due Anne Evans 638-1966 Nearly half of that comes year any financial involve- million, capital improve- to the volatility of world

in the form of guarantees for loans that could be taken out by: Skeena Cellulose to make operations, particular- ly those at its Prince Rupert

___ Pulp mill, more efficient,

The figures were included in the provincial govern- ment’s 1999-2000 budget, beginning April 1, as part of the government’s net debt because it’is-acting as a guarantor for Skeena Cel- lulose.

The province owns 52.5 per cent of the company (up from an original 25 per cent when ‘it bought out another . ,cd-owner, the Royal Bank),

owns 27.5 per cent of the company and the unionized

ment with Skeena Cellulose was recorded, the province’s debt load was $64.6 million.

For the fiscal year which ended March 31, the debt load: bad climbed to. $132.2 million and by the end of March next year, the figure is estimated to be at $226.8 million.

The first year’s total in- cludes $31.4 million pay- ment to buy out the portion of the company owned by

the Royal Bank, a $17 mil-

lion guarantee of a loan for operating money, $3.1 mil- lion in capital improvements and $13.1 million in pay-

Ieft hanging when the com- pany nearly went under in

ments increased to $15.4 million, $18 million was spent on building roads to logging areas and payments to unsecured creditors rose

- slightly to $14.5 million.

By the time the fiscal year ends next March, the capilal improvement portion is scheduled to rise to $110 million with no increase in other areas.

Provincial spokesman Don Zadravec noted that while Spending and loan guaran- tees are recorded as a debt recorded against the provin- cial government in budget documents, the debt is con-

‘t to boost SCI loan tally

that Skcena Cellulose is meecling repayment obliga-

pulp prices and their poten- tial impact on Skeena Cel- lulose Inc,’’

And while there is no in- dication the company will need loan guarantees to ‘in- crease its operating line of credit this year, that might not be the case later on,

“Right naw the company is living within its current Operating line and when the decisions are made about capital expansion, there will be an assessment where the Operating line sits and of changes, if any,’’ said Zadravec.

A company spokesman

FRBC happy with progress

of loans made to businesses = sus"

FOREST RENEWAL B.C, officials say they’re happy with the state of low-cost loans made to logging con- tractors and other businesses hurt by the collapse of Skeena Cellulose two years age.

Approximately $33.5 mil- ' lion has been loaned to 205 northwest businesses aut of

week,

The FREC loans were part of an overall financial res- cue plan which has now seen the provincial govern- ment take a majority owner- ship in Skeena Cellulose since its parent, Repap, leaded it with debt and walked away two years ago.

They were made available

failure (10 repay),’” he said,

“Some have already paid off and others are on their way,’’ Dolsen added of the five-year loan program.

No interest is charged in the first year and just one per cent in the sccond year with rates coming close to standard market charges by the end of five years.

stoke closed.

“That set the precedent and loans there have gone pretty well,’* said Dolsen.

He said the cooperation of financial institutions such as the Northern Savings Credit Union and agencies such as 16-37 Community Futures Development Corporation helped spced loan approvals

The Terrace Standard, Wednesday, April 14, 1999- All

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Don McDonald said the $110 million in loan guarantees is down from the $170 million originally committed by the province and the T-D Bank as part of a restructuring plan put to- gcther in 1997,

And the $110 million available for capital im- provements doesi’t neces- sarily mean it will be spent, said Don McDonald.

‘*When (current company president} Bill Stecle came in’ he worked the numbers so that only money would

Purchase any A-G styling product & receive an A-G Shampoo for

Northwest mayors already have their eye on $41 mil- lion of the available $110 million.

They travelled to Victoria last month to ask that the province kick loose the money to improve and re- open a closed pulp produc- tion line at Prince Rupert. |

Doing so, they said, would put loggers back to work

HAIR GALLERY

a possible $36.5 million to any business which could — The northwest loans made _in the northwest. feeding the mill and prepare - made available by the demonstrate significant by FRBC represent about 40 © -FRBC receives its moncy it for an anticipated upswing 4711D KEITH AVE. 635 3729 provincial crown corpora- harm arising from Repap’s per cent of the money it from stumpage fees. in pulp markets.

tion.

failure to pay unsecured

made available to

“OF the amount, $4.049 creditors. businesses in trouble across million has been repaid and = ‘‘As of now we have the province because of the $697,000 has gone bad, in $28,618,000 outstanding slumping forest industry, default, but we are trying to and that secured 1,700 FRBC first got into the

do some kind of collect- ing,"’ said FRBC finance of- ficial Brian Dolsen last

jobs,” said Doisen. “According to the experts, there’s not that much of a

crisis loan business in the mid-1990s when Evans Forest Products in Revel-

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