Members of the Communications, Energy and Paperworkers’ Union in all locals with members employed by Catalyst Paper Corporation are voting on whether or not to accept a new collective agreement with the corporation.
Presidents of the locals, including Powell River’s Local 76, recommended acceptance of the agreement, which will start in 2012. The agreement is coming early at the request of Catalyst, which is in the midst of restructuring its finances as it struggles to pay off interest on debt or face default. Powell River voted on Wednesday, December 28. The results of the vote are not yet known.
Catalyst’s total debt was listed at $840 million in its third-quarter financial results. The company began the review of its capital structure in June 2011 and has been negotiating with 2014 and 2016 bondholders to deal with the existing debt structure. If it fails to make the interest payment within 30 days, the 2016 bondholders could declare the $390-million principal amount and all accrued interest immediately.
Members of the union were given a presentation on the agreement and a chance to ask questions before voting.
“We urge all of you to attend and be informed on what is one of the most important votes in our local’s recent history,” wrote Mike Verdiel, Local 76 president, in a letter to union members.
Operations are not at risk, according to Kevin Mason of Equity Research Associates, unless a mill is losing substantial amounts of money. The most likely operation to be shut down, if any shutdowns occur, is the recycled newspaper plant at Snowflake, Arizona.
Operations at all mills will continue as usual during this process.
