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Thunder Bay Fine Papers in receivership

Thunder Bay Fine Papers, one of the city's feel-good stories in 2008, entered into receivership in late October. Court-appointed receiver Deloitte Touche took possession of the mill and will attempt to sell the closed-down north end facility.
Ian Ross


Thunder Bay Fine Papers, one of the city's feel-good stories in 2008, entered into receivership in late October.

Court-appointed receiver Deloitte Touche took possession of the mill and will attempt to sell the closed-down north end facility. CIT Business Credit Canada, a secured creditor is owed $14.7 million with smaller debts owed to local suppliers and contractors.

It had been a tumultuous three years for employees and management in restarting the former Cascades mill. After a rocky financing process to raise $42.7 million, (including a $12.7 million loan guarantee from the Ontario government, a $1.5 million from the Northern Ontario Heritage Fund and $1 million from the province's Forest Sector Prosperity Fund), the mill never went fully operational with its three paper machines.

A partial start-up last spring was followed by a summer shutdown and layoffs of 180 employees that extended into the fall because of a lack of sales in catalogue and coated paper. It led to a management shakeup that saw company president Andre Nicol ousted and replaced with John Hitchman and a new sales team.

This fall, management was pleading for more money. Major private shareholders reportedly came to their aid to fund their short term debt. Loans were also being secured in the private sector to look after the medium and long term debt.

"The culmination spells a new start for Thunder Bay Fine Papers in the very near future," said president and COO John Hitchman in an Oct. 7 statement.

With an important Christmas catalogue season approaching, the company was expecting to bring its No. 8 paper machine online, with a second to start a week later. A third machine was to be restarted when modifications and capital projects scheduled for early 2009 are complete.

Across town, Abitibi-Bowater announced a two-week shutdown until Nov. 24 of its Thunder Bay pulp and newsprint operation, laying off 600 workers because of reduced customer demand. The company is also reducing hours and operating days for 130 workers at a nearby sawmill.