Tembec Secures $30 Million Financing for Specialty Cellulose Mill Upgrade
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Tembec, Montréal, Qué., Canada, reports that it has entered into a $30 million loan facility with Integrated Private Debt Corp. (IPD), the private debt division of Integrated Asset Management Corp. of Toronto, Ont., Canada. The financing will be used to fund a portion of the previously announced $190 million capital project to upgrade the company's specialty cellulose mill in Temiscaming, Qué. When combined with the $75 million of project financing announced in March, the company has now attained its objective of raising $105 million of project financing.
The project involves the replacement of three old boilers with a new high-pressure boiler designed to burn waste sulfite liquor, a co-product of the specialty cellulose manufacturing process, producing green steam for use at the facility. The project also calls for the installation of a new electricity turbine that will be driven by this steam. The turbine will increase the Temiscaming facility's green electricity production capacity from its current 10 MW to 60 MW. The boiler is scheduled to startup in December 2013, followed by the turbine in May 2014. Hydro-Québec will offtake the additional green electricity produced by this turbine under a 25-year contract at $106 MW/hr, indexed with CPI, which will strengthen and stabilize Tembec's revenues through the economic cycle.
Once the new equipment is in operation, Tembec expects a four-year return on investment, through new revenues from green electricity, the additional production of 5,000 metric tons of specialty cellulose, and lower costs.
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