Richmond-based Catalyst Paper Corp. (TSX:CTL) plans to raise $125.3 million in a rights offering to fund a portion of the acquisition of Arizona's Snowflake paper mill, which it announced in mid-February.
The offering is being managed by BMO Nesbitt Burns Inc. and Genuity Capital Markets.
Third Avenue International Value Fund, which is Catalyst's largest shareholder, will support the rights offering if the company can't raise the full amount on the market.
Snowflake is one of the lowest-cost newsprint mills in North America and has had average annual earnings before interest, taxes, depreciation and amortization of US$30 million. For the year ending September 30, 2007, the mill's revenue was US$185 million.
The deal to acquire Snowflake, which is subject to customary closing conditions and regulatory and U.S. Department of Justice approval, is expected to close in 2008's second quarter.
Catalyst's share price range during the past week: between $1.65 and $1.67; 52-week high: $3.98; 52-week low: $1.19