Pulp mill deadline passes, new deadline set!

The long running saga of Skeena Cel, which begot New Skeena Forest Products, will play out for a few more months yet. Sun Wave Forest Products has asked for another extension to the deadline, as it wanders the bureaucratic byways of the Chinese Central Government. Sun Wave has agreed to continue to fund the process of keeping the mill on the market, while the Central Government decides on whether it wants to own a Canadian pulp mill or not.

It will be interesting to see how the current political suspicion of Chinese companies by the Federal Government, might come into play in the project. In the last few weeks the Federal Government has expressed concern over some of the practices of Chinese industry regarding Canadian interests, whether that more vocal concern has any impact on any eventual decision on Canadian investment remains to be seen.

For now, the latest date to circle on your calendar is June 15, that’s the next deadline put in place by the receivers. The Daily News had complete details on the extension in yesterday’s edition, reprinted for your research purposes here.

CHINESE ‘STILL IN GAME’ AS DEADLINE PASSES
By Leanne Ritchie
The Daily News
Thursday, April 27, 2006
Page One

Sun Wave Forest Products has sought another extension but continues to pony up non-refundable cash as it pursues a deal to purchase the pulp mill in Prince Rupert.

Larry Prentice, of Ernst and Young Inc., the court-appointed receiver, said the company came forward seeking an extension on Monday. Up until that point, it was hoped a representative from the company would come from China to sign off on the deal before the April 28 deadline.

“They came to us Monday and asked what it would take to extend the deal,” said Prentice.

The company has agreed to triple its non-refundable deposit and continues to pay virtually all the costs of the extension.

“All of that they readily agreed to do,” said Prentice.

Back in April, Sun Wave committed in excess of a million dollars to continue to explore its purchasing options.

“The non-refundable deposit is now a very sizable percentage of the overall transaction,” he said.
An extension has been granted until June 15.

Sun Wave Forest Products is a B. C. company owned by the China Paper Group, which in turn is 80 per cent owned by the Chinese central government.

Sun Wave is considering purchasing the land on which the former Skeena Cellulose pulp mill sands as well as all the pulp mill site assets not previously acquired, real estate and other assets in Port Edward and New Hazelton and a substantial forest licence in the Kispiox forest district. The purchase is worth around $4 million.

Sun Wave came forward at the last minute in 2005 to purchase the majority of the pulp mill equipment in a fire sale following the bankruptcy of New Skeena Forest Products. At that point, it was believed the mill would be dismantled and sent overseas.

However, since then, Sun Wave has worked on tax, fibre and labour agreements with the city of Prince Rupert, Coast Tsmshian and Pulp, Paper and Woodworkers of Canada to operate the mill in B. C. The pulp produced locally would feed the China Paper Group’s numerous paper mills in Eastern China. The company has been seeking the approval of the Chinese central government to complete the international purchase since last November. It would be the first international operation for Sun Wave.

Prince Rupert Mayor Herb Pond said he was not surprised by the delay.

“We’ve been told by a number of parties for Sun Wave to get permission from the Chinese government was going to be time consuming,” he said.

While the purchase price for the lands and licence is no more than $5 million, a decision to operate the pulp mill will represent close to a $100 million investment on the part of the China Paper Group. While the city would love to see the mill up and running, Pond said he’s encouraged Sun Wave is still at the table and still talking.

“They are still in the game and they are showing interest.”