“It was used simply to buy out existing debt from the mill’s bank lenders,” the MP said.
Byrne made the comments during an address Thursday to the Greater Corner Brook Board of Trade at the Greenwood Inn and Suites.
He said approximately $85 million was simply offered to the Bank of Montreal, Scotiabank and others to put the mill’s debt into the hands of the province, and roll that debt into the province’s Finance Department, “Making it all our debt.”
While the move made the mill’s debt more “patient,” it afforded little in the way of any other elements of a mill revitalization plan.
In a follow-up email, Byrne referenced an article posted to The Western Star’s website on Feb. 20, 2014 that quotes a government press release saying approximately $85 million of the loan will be released at the beginning of the agreement to allow the company to refinance existing debt, and for working capital. The article also says that the remaining $25 million would be provided as planned capital improvements are completed.
Byrne said the important thing is not that there was no money going to capital re-investment in the plan. It’s just that $25 million spread over an extended period of time would still only be a fraction of what the mill had traditionally spent itself.
“In the 1990s, Corner Brook Pulp and Paper and Kruger were spending tens of millions a year on capital repairs and improvements.”
Byrne said with the size of the mill, its age and the immediate issues it faces, investing more money in its long-term future, capital improvement rather than just debt transfer is something that would have been appreciated by him and many other people.
Byrne said there may still be challenges ahead and times of uncertainty. “But we need confidence that our core economic engine is strong and is healthy. All else fails if you do not have that.”
And as he did in other areas he touched on, Byrne encouraged the board to get involved — to keep in regular contact with the mill, to ask for updates on capital plans, the amount invested in the mill, progress on pension solvency and updates on supply opportunities for local businesses.
See the next page for more on Byrne's speech at the Greater Corner Brook Board of Trade
Board of trade can help foster economic growth, Byrne says
Gerry Byrne had a message for the Greater Corner Brook Board of Trade on Thursday and that’s not to buy into the idea of doom and gloom emanating in the province now.
Provincially things may not be looking the best now, but he said Corner Brook’s economy has been stable and there are opportunities for growth.
During a breakfast at the Greenwood Inn and Suites he said the board has a role to play in fostering stronger economic development and growth for the city.
He challenged the board to look at issues external to Corner Brook.
“Build networks outside of Corner Brook, build relationships outside of Corner Brook, understand the marketplace that exists outside of Corner Brook and in exchange that relationship will actually help in the advocacy effort, the lobbying effort to get government to understand the benefits and value of investing in post secondary education and our hospital.”
On the hospital, Byrne said from a purely social point it needs to proceed as health care is a basic right.
But from an economic point of view, Byrne said the construction would help stimulate the economy of the entire region.
Byrne also touched on the sawmill and lumber industry, the fishery and tourism as areas the board needs to be involved in.
And he referenced the position the board has taken on Marine Atlantic’s fare reduction on the Argentia to North Sydney run calling it a breath of fresh air from a new voice. Byrne said reducing the rates is the right thing to do, but it should be done across the board.