NewPage Port Hawkesbury Granted Extension to Creditor Protection Period
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The Nova Scotia, Canada, Supreme Court has granted the NewPage Port Hawkesbury, N.S., Canada, mill another extension to its creditor protection period. The mill now has until August 31, to wrap up the sale and transfer of the mill's assets to Pacific West Commercial Corp. of Vancouver, B.C., Canada.
Pacific west, a subsidiary of Stern Partners of Vancouver, has a deal with Nova Scotia Power to get a break on the mill's electricity bill. The energy rate is based, in part, on a complex tax structure that still needs approval from the Canada Revenue Agency and the provincial Utility and Review Board. Nova Scotia Power, as part-owner, is hoping to claim a tax write-off for the mill's losses, as compensation for its reduction in power costs.
As reported by ForestTalk.com, hearings at the Nova Scotia Utility and Review Board are continuing, and the power rate reduction that Pacific West Commercial Corp. is asking for will give the company among the lowest, if not the lowest, power costs in North America for a seven-year period. If Nova Scotia Power and Pacific West Commercial Corp. have underestimated the amount of power required to operate the mill, then the ratepayers of Nova Scotia will be on the hook, and will have to subsidize the power costs of the mill, according o the ForestTalk.com report.
Ron Stern, CEO of Pacific West Commercial Corp., said he will walk away from the deal if this rate proposal is not approved as is. "Unless the Port Hawkesbury mill can become a very low- cost operation, it simply will not succeed," Stern said.
The province of Nova Scotia is spending $100,000 a day to keep the mill hot-idled.
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