Pope and Talbot Applies for Protection

Monday, October 29, 2007 09:10 AM

Pope & Talbot, has applied for protection under the Companies' Creditors Arrangement Act (CCAA) of Canada.

In a release issued this morning, the company says it made the move in order to address its financial challenges and to support efforts to be a more efficient organization.

"We want to assure our customers and employee colleagues that Pope & Talbot is taking all available steps to allow its business to continue operating as a going concern," said Harold Stanton, President and CEO. "Our customers can continue to rely on Pope & Talbot to supply their critical business needs. This protection is a necessary and responsible step for the company at this time. Our customers and business partners want Pope & Talbot to succeed, not only because of our over 150-year heritage, but because of the value our company brings to the marketplace."

Persistent record low demand for lumber, high priced pulp chips and sawdust, the appreciation of the Canadian dollar and the high cost of debt service have combined for an untenable business environment. Despite doing many things to preserve liquidity, Pope & Talbot has determined the best alternative is to seek protection and flexibility under the reorganization law in Canada, because this is the home of its principal operating subsidiary.

The company will use the protections of the CCAA to provide additional time for it to continue its restructuring efforts, which include, but are not limited to, the sale of certain or all of the company's assets.

Pope & Talbot expects to fund current operating needs, including wages, benefits and other operating expenses, with cash generated from daily operations while under CCAA protection.

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Posted on Monday, October 29, 2007 09:10 AM in News by 250 News

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Comments

Posted by: northman on October 29 2007 10:40 AM

Their stock is at 12 cents, Might be worth keeping an eye on if they stay in business. More info on the CCAA can be found at..
http://www.alger.ca/ccaa.htm
Personally i hope they sell the joint to a secure company instead of dragging on and on while the communitys and employees are stuck in the middle of this.

Posted by: Andyfreeze on October 29 2007 1:03 PM

Layoffs started happening in the Fort today.
Not good at all!

Posted by: red2b on October 29 2007 2:11 PM

They have no consideration for the small companies, suppliers, contractors etc. that they have screwed. The banks, CEOs etc. will get thier easy money, while the small suppliers and contractors get nothing. Time to bend over I guess.

Posted by: dgdiggler on October 29 2007 2:49 PM

Next stop - bankruptcy

Posted by: NMG on October 29 2007 5:00 PM

It's unfortunate, but perhaps it's yet another sign for people directly dependant on the forestry industry (job wise) to start looking at opportunities that may pop up elsewhere..

One would think it's only a matter of time before the same story is making news for another mill in another City.

Posted by: Concerned4forestry on October 29 2007 5:20 PM

The layoffs started 2 weeks ago. The dollar pushing 1.05 U.S? Doesn't look good for anyone in solid wood.

Posted by: dgdiggler on October 30 2007 8:16 AM

There is another big story about a pope and talbot mill - in Nanaimo....It was on global last night I think....they're expecting to lay off 500 or so workers...

Posted by: Andyfreeze on October 30 2007 8:29 AM

They have already cut by 17% at Harmac as mentioned on the news last night.
I did some poking around on the net and this company is in MAJOR trouble.
Toast me thinks!
Very sad for the employees.

Posted by: northman on October 30 2007 1:04 PM

I did some poking around also on P&T a majrority of the investment reports in the protland business journal and other misc reports didnt have very good things to say about this company.. I dont like how american corporations come into these communitys and suck the life right out of them.

Posted by: NMG on October 30 2007 6:12 PM

"I dont like how american corporations come into these communitys and suck the life right out of them"

Do you think the outcome would have been any different if Canfor still owned that mill? Would they have turned it into this miraculous operation? I'm thinking not.

Posted by: northman on October 30 2007 6:49 PM

"Would they have turned it into this miraculous operation? I'm thinking not."
It wouldnt be a miraculous operation but they had more going for that mill the pope tal ever had they were forced to sell it after they took over slocan.
1)Canfor had 1 million cubes of anual allowable cut in prime forest with that mill.
2)Fort st james forest district is more stable than PG Vanderhoof and Nadina becasue of its large untaped forests. (They still have green trees)
3)That mill has direct rail access to remote forests.(in canfors cutting authority)
4)They are more financialy stable then pope and tal look at the share structure.
5)Pope and talbot has been broke before they took over fsj division. Google it!
6)pope and talbot took 600 000 cubes as an anual allowable cut.. not enough to feed the mill.

Posted by: NMG on October 30 2007 9:13 PM

So is P&T to blame for purchasing the mill or is Canfor to blame for entering into a deal that saw them get rid of it? Or perhaps the government is to blame for forcing Canfor to sell it?

Either way, I'm not sure I see how this particular situation is one of a "US company shafting small town Canada".