Date Closed

December 6, 2017

Lead Office

Montréal

Value

337.60 Million CAD

In 2017, McCarthy Tétrault LLP acted for Kruger in their diversification project of the operations of the Wayagamack coated paper and kraft pulp mill of Kruger Wayagamack Inc. located in Trois-Rivières, Québec and the Brompton newsprint paper mill of Kruger Publication Papers Inc. located in Sherbrooke, Québec to transition from publication papers to the production of specialty papers.

Pursuant to this transaction, Kruger Inc. and Investissement Québec (“IQ”) created Kruger Speciality Papers Holding L.P. (“KSP LP”), a new joint venture to own and operate, through subsidiaries, the Wayagamack and Brompton mills and the biomass cogeneration plant of Kruger Energy Bromptonville L.P. adjacent to the Bromptonville mill. IQ made a C$44.6 million equity investment in KSP LP and provided a subordinated loan of C$47.5 million. A senior debt financing of C$80 million was also made available by a lending syndicate to the Brompton and Wayagamack mills.

Prior to the equity investment and financing, an internal reorganization was completed pursuant to which the assets of the Brompton and Wayagamack mills were transferred to KSP LP.
The transaction also involved the implementation of loan increases in addition to the senior and subordinated financing of the KSP LP group:
• a C$7.5 million increase to the credit facility provided by IQ to Kruger Trois-Rivières L.P. (“TRLP”) and a C$9.6 million increase to the senior credit facility made available to TRLP to finance the increased production of Thermo-mechanical pulp to be supplied to the Wayagamack and Brompton mills
• a C$4.8 million increase to the financing of Cogen LP
• a C$20 million increase of the Kruger Inc. senior syndicated financing 

McCarthy Tétrault advised Kruger with a team led by Marie-France Gagnon and Philippe Fortier.