Business
Neenah Paper Signs Definitive Agreement to Transfer Terrace Bay
Neenah Paper Signs Definitive Agreement to Transfer Terrace Bay.
About this update from Northpalm Capital Corp.
[{"type":"text","content":"\n\n\n\n\nALPHARETTA, Ga., Aug. 8 /CNW/ -- (NYSE: NP) -- Neenah\nPaper, Inc. today announced it had signed definitive sales agreements with\nTerrace Bay Pulp Inc. and Eagle Logging Inc., members of the Buchanan group,\nto transfer the company's Terrace Bay pulp mill and the company's woodlands\nassets. A tentative agreement between the parties was announced in early May.\nPursuant to terms of the final agreement, Terrace Bay Pulp Inc. will\nassume responsibility for the Terrace Bay operations, including existing\nemployee and other contracts, and certain assets and liabilities related to\nthe operation. The assets of the company's woodland operations will be\ntransferred to Eagle Logging Inc. Neenah Paper will make a cash payment of\napproximately $18 million and retain certain working capital amounts,\nprimarily accounts receivable, finished inventories and accounts payable, as\nwell as employee liabilities for pension, long-term disability and post-\nemployment medical and life insurance for retirees.\nIn accordance with the agreement, Neenah Paper will initiate plans to\ncurtail and settle its Ontario, Canada defined benefit pension plan. Estimated\ncash costs related to this settlement are $18 million, with an initial payment\nof $11 million anticipated in the third quarter.\n\"This agreement represents a win for all parties, including Neenah Paper's\nshareholders, the workforce at Terrace Bay and their communities, and also\nBuchanan Forest Products,\" said Sean Erwin, Chairman and Chief Executive\nOfficer. \"It allows the mill to continue operating and cash requirements are\nsubstantially lower than if we had proceeded to close the mill. In fact, one-\ntime costs have been largely funded through a drawdown of working capital this\nyear. Neenah Paper is now in a position of added financial flexibility and\nstrength and can focus on growing our core paper businesses.\"\nIt is anticipated that the transaction will close in August.\n\nAbout Neenah Paper, Inc.\nNeenah Paper manufactures and distributes a wide range of premium and\nspecialty paper grades, with well-known brands such as CLASSIC(R),\nENVIRONMENT(R), KIMDURA(R) and MUNISING LP(R). The company also produces and\nsells bleached pulp, primarily for use in the manufacture of tissue and\nwriting papers. Neenah Paper is based in Alpharetta, Georgia, and has\nmanufacturin...