A2 - The Terrace Standard, Wednesday, March 5, 1997

REPAP CRISIS

Mayor flies to Victoria —

MAYOR JACK Talstra is flying to Victoria today to drum up financial assis- tance for lagging contractors hit hard by Repap's financial problems.

“What we hope to do is press upon the government the need for‘some sort of package that has a bottem line of keeping every one working here i in- the Terrace area,” Talstra said.

“We want to see the mill continue ‘to --

run. We want to see the contractors be

paid. including funds owed to.them now...

And we want to see them be able to con- linue to work.”

The mayor made the comments in advance of a summit meeting yesterday moming of-northwest mayors.

Talstra’s trip marks the end of nearly two weeks of efforts to get the provincial government to assist contractors which are owed 330 million by debt-ridden

Repap. City officials had been working on a plan to have Forest Renewal B.C. to

extend loan money to Repap B.C., which

would immediately be used to pay the

* contractors.

Government reaction to the plan isn’t known and it was disrupted late last week when Repap B.C. was cut out of the Avenor-Repap merger,‘and the B.C. sub-

sidiary filed for protection ‘from ils

creditors.

Toronto- Dominion Bank and the Royal Bank.

“y think that’s still there to be dis- cussed,” Talstra said of assistance from FRBC.

Talstra said he hopes his goal of keep-

ing people working can be accomplished,

“In speaking to members of the govern-

ment, they seem to be taking a reasonable approach to it,” Talstra said. “It’s avery serious. matter. But it's not-a hopeless matter. People have to hang in there and

see what washes out in the next two'or .

three weeks,” i

He’ll ‘also press the government to address ‘the more long term issues of reducing the cost of Jogging in the

- on northwest. “In. this circumstance, the. provincial government moved quickly to listen to. ~ Repap's ‘other major. -creditors,“‘the

Talstra'said he aia skeptical of sug-

; gestions from the Hazeltons and Stewart that northwest communities could band

together and take over Repap B.C.

“All that requires money,” he said. “Communities don’t necessarily have money. We think it’s very premature at this point.”

FROM FRONT

Repap B.C. cut out of deal

owed to Victoria will climb from $6 million today to as much as $10 million over the next six months.

Also waived as part of the licence tansfer is Repap’s commil- ment last year to make its best effort to curry out an upgrade of its Prince Rupert pulp mill.

Miller said the government is also continuing its efforts to find ways of reducing the cost of logging in B.C.

Miller said others will also have to share the burden of keep- ing Repap afloat. “I think everybody in the northwest'— whatey- er role they play. ~ is going to have to. iry to be helpful i in the face of a pretty serious situation.”

The Royal and TD banks have appointed David Bowra ‘of Coopers & Lybrand Ltd.:to:serveas monitor and oversee the’ restructuring of Repap B.C. The creditor protection granted under the Companies Creditors Arrangement Act took effect at 9 a.m. Monday moming. :

Suppliers are temporarily prevented from suing the ¢ company . for the money owed.to them up'to March 3, and they're directed - to continue working for Repap on a.cash payment basis.

Arepayment plan wil! eventually be worked out for those owed money, but it will be some time before it’s known what proportion of that money creditors will get back.

Creditors owed less than $2, 500 will receive full payment.

“This is nota short-term thing.” Bowra said. ‘This is going to bea long term thing. This could be a three- to five year work out.”

Repap B.C. vice-president Rudy Schiwartz said the move was necessary due to a combination of factors.

They include the company’s high debt load, a 110-day strike at its Prince Rupert pulp mill at the peak of the pulp market, the

Sawmill starts up

MORE THAN 150 workers at West Fraser’s sawmill here are back on the job after a Iwo- and-a-half month shutdown.

Skeena Sawmills operation restarted. yesterday, even though the company says it's still losing money in this part of B.C.

The mil! will consume a three-month inventory of logs in the yard prior to any resumption in logging operations.

- West Fraser officials say they hope to see government action to improve the economics of logging here:

LIEN NOTICES have been posted at the Skeena Cellulose log yard on Keith Avenue. a

From front

Land protection

wildlife that are considered “vulnerable or sensitive to hu- mau activities or natural events.”

The bald eagles and great blue heron are known to use habitat within city-limits, the report says. And tailed frags and western serecch owls, although not known to occur here, “‘have a high probability of occurring.”

Terrace Greenbelt Association representative Lori Mer- rill said her first reading of the report is thal it’s not overly stringent.

She urged council lo look closely al its recommendations and not immediately move to water it down:

“Tt’s great thal they” ve-done this study and ] hope they respect it,” she said.

She said the greenbelt g association is meeting this week to.

go over the report.

Whatever guidelines are uitimately adopted by council will become: part of the cily’s: Official Community Plan, and will be ‘enforced by. tle system of development pernuits. Public hearings will be held on’ the proposed guidelines.

subsequent collapse of pulp prices from $1,000 a ton to barely $500 a ton today, and the increased cost of logging operations in B.C. resulting fram the Forest Practices Code and increased stumpage fees,

**We' ve had an almost a 50 per cent decline in price,”

’ Schwartz said, ‘“The cost of doing business in British Columbia

has escalated over the last three years. Combine it all with the cost of the debt, and Repap British Columbia will be unable to carry on as before.”

Schwartz estimated pulp prices would have to average $650 to $700 a ton before Repap B.C. in its present configuration

could break even, “Pulp prices are very low and unsustainable,”

he said. «

a - Schwartz would not rule out layoffs as one way of making the

company more efficient, but said he didn’t see where further cuts Gould be made, “We're a fairly lean organization as it is.”

‘Schwartz said the total 3140 million owed to creditors other than banks includes Pacific Northem Gas and other utilities, chemical suppliers, trucking suppliers, logging contractors and even the City. of Prince Rupert for pulp mill property taxes.

The revised merger offer between Avenor and Repap means that it will now take eight Repap shares to get one Avenor share. The prior offer was 4.25 Repap shares per Avenor share.

The change is expected to appease Avenor shareholders on March 26 when both sets of shareholders vote on the proposal.

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