GreenFirst Forest Products announced that Kap Paper Inc., a wholly owned subsidiary of GreenFirst, has entered into a loan agreement with a third party establishing a non-revolving term loan facility of up to $24 million to support its paper mill operations in Kapuskasing, Ontario, Canada.
The loan is to be used for general working capital purposes, GreenFirst said.
"The financing will afford us the opportunity to move forward our long-term strategy for Kap Paper, ensuring its competitiveness," said Terry Skiffington, Kap Paper's CEO.
Kap Paper remains focused on mill operations and has made considerable improvement on the operational challenges faced in the last two reported quarters, some of which were caused by external events. Kap Paper looks to build on this momentum to further improve operational efficiencies in what has been a tough pricing environment for paper products.
Kap Paper has the capacity to produce 220,000 metric tons per year of newsprint, controlled bulk book grades, and food service bag grades. The mill produces Forest Stewardship Council (FSC) certified (FSC-C167905) newsprint and bulk paper using virgin pine and spruce fiber from Canadian forests.
GreenFirst explained that Kap Paper is the only pulp and paper mill operating in Eastern Ontario. As such, its operations are imperative to help mitigate challenges related to diminishing chip consumption, which is jeopardizing sawmill operations in Ontario.
Joel Fournier, CEO of GreenFirst, noted, "[GreenFirst's] sawmills in Kapuskasing, Hearst and Cochrane utilize Kap Paper's operations as an outlet for their chips. The financial support is integral to the Company's long-term strategy."
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