Resolute closes $300-million sale to boost financial flexibility

Resolute Forest Products (RFP) announced that it completed the $300-million sale of the Catawba, South Carolina, paper and pulp mill to New-Indy Containerboard, LLC.

The total purchase price consists of $260 million in cash and about $40 million of balance sheet liabilities, mostly net pension benefit obligations.

“We are pleased to have completed the sale of the Catawba mill to New-Indy and wish the new team every success with its investment in the diversification of the mill’s operations,” said Resolute CEO Yves Laflamme.

“We want to thank our employees for their hard work and dedication toward this successful outcome, and are pleased that the community will continue to benefit from the mill’s economic and social impact,” he added.

Resolute plans to use most of the proceeds from the deal to repurchase $225 million of its 5.875% senior notes due in 2023, in order to improve its financial flexibility.

Back in November, Resolute posted its third-quarter results, with net income soaring to $117 million or $1.25 per diluted share, from last year’s $24 million or $0.26 per share. It also announced the $62-million sale of Fairmont, and declared a special dividend of $1.50 per share. Quarterly sales hit $974 million for the quarter.

Weeks after the results, Resolute named Remi Lalonde as CFO. Lalonde succeeded Jo-Ann Longworth, who bid farewell to the firm after seven years as Senior Vice President and Chief Financial Officer.

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