Fortress completes sale of Quebec co-gen plant
July 27, 2016
By Scott Jamieson
Fortress Paper Ltd. announced that its wholly owned subsidiaries, Fortress Global Cellulose Ltd. and Fortress Lumber Corp., have successfully closed the asset purchase agreement (APA) entered into with LSQ Energy, L.P. and LSQ Development, L.P., previously announced on June 23, 2016.
The APA provides for the sale of all of the assets relating to the non-operating pulp mill and sawmill, as well as the cogeneration facility, located in Lebel-sur-Quévillon, Québec. Pursuant to the closing of the APA, the trust agreement among BMO Trust Company, 9109-3294 Québec Inc. (“9109”), Domtar Inc. and Fortress Global dated June 13, 2012 (the “Trust Agreement”) was amended, and LSQ assumed $7.5 million of Fortress’ liabilities thereunder, which amount has been paid to the trustee pursuant to the amended Trust Agreement and to 9109 in repayment of amounts previously paid into the trust. Fortress also obtained the release of the letters of credit in the aggregate amount of $1.125 million which had been previously deposited with Hydro Québec Distribution in connection with an electricity supply contract.
Concurrent with the closing, Fortress assigned and transferred a $7.0 million note received from LSQ to Investissement Québec (IQ), acting on behalf of the Québec Government, as early repayment of the principal amounts due in 2017 pursuant to the terms of the indebtedness owed to IQ by Fortress Specialty Cellulose Inc. (“FSC”). In addition, as consideration for the early repayment of principal and the guarantee of the note provided by FSC, IQ agreed to defer an aggregate amount of $6.3 million of quarterly principal payments otherwise payable on September 30, 2017, December 31, 2017 and March 31, 2018, without penalty or interest accruing on such amounts for one year. The remaining principal amount will be amortized in equal quarterly installments commencing June 30, 2018 over the remaining term of the loan.
About Fortress Paper
Fortress Paper operates internationally in two distinct business segments: dissolving pulp and security paper products. The Company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill located in Canada, which has expanded into the renewable energy generation sector with the construction of a cogeneration facility. The Company operates its security paper products business at the Landqart Mill located in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers.
About Nexolia Bioenergy Inc.
LSQ Energy, L.P. and LSQ Development, L.P. are each a wholly owned subsidiary of Nexolia Bioenergy Inc., a private company focused on investing in natural resources, renewable energy and other projects that could result in a sustainable economic development and job creation, provide services and resources to northern communities while operating in a transparent and respectful manner towards the communities and the environment.
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