Pope & Talbot back to court as mill deal flounders

Tue May 6, 2008 11:43pm BST
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(Figures in U.S. dollars)

By Allan Dowd

VANCOUVER, British Columbia, May 6 (Reuters) - A Canadian court will try to sort out the future of Pope & Talbot's PTBT.PK remaining pulp mills on Wednesday after a deal to sell the facilities in Canada and United States abruptly fell through.

The company is exploring its options and has been approached by parties interested in the three mills, which had been slated for sale to Indonesia's PT Pindo Deli, a unit of Sinar Mas Group (SMMA.JK: Quote, Profile, Research), a Pope & Talbot spokesman said on Tuesday.

"The company is now obviously considering selling off individual mills to individual buyers, and a lot of it is really up in the air right now," said Mark Rossolo. "We don't have a lot of information."

A court hearing is scheduled for Wednesday in Vancouver.

Pope & Talbot was forced to sell all its lumber and pulp operations after seeking court protection from creditors in October -- its finances crushed under the weight of heavy debt, weak lumber prices and a strong Canadian dollar.

The Harmac and Mackenzie pulp mills in British Columbia and the Halsey mill in Oregon have a combined annual capacity of about 830,000 tonnes and employ more than 700 workers.

A deal to sell the facilities as a group was struck in January, but Pindo Deli pulled the plug on the plan on May 1, just as the deadline for Pope & Talbot's court-approved financing was set to expire.  Continued...

 
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