Port Alice mill creditors won’t get much back, trustee says

Neucel closed in 2015, 400 lost jobs

With debts of more than $272 million and assets worth no more than $70,000, no creditors of bankrupt Neucel Specialty Cellulose in Port Alice should expect to see any more than a sliver of that they’re owed, according to the trustee overseeing the bankruptcy.

In its first report to creditors, PricewaterhouseCoopers made it clear there is little meat on the bones of the idled pulp mill.

“The underlying value of the mill assets and the real property has not been determined by the trustee or the receiver. However, given the large amounts owing to the province as well as the significant future costs to be incurred in addressing the existing environmental issues, there is no prospect of any recovery to the unsecured creditors,” Lucas Matsuda, vice-president with PWC, writes in the report.

The Neucel Specialty Cellulose pulp mill, founded in 1918, was declared bankrupt earlier this year with $272 million in debts. It was closed permanently in 2015.

It had been owned since 2011 by Fulida Group Holdings, a Chinese textile producer. The mill made a variety of specialty cellulose products used to produce rayon filaments, pharmaceuticals, food products, and cleaning detergents.

Plagued by low prices for sulfite pulp and rising operating costs, the Fulida was forced to shut down the mill, putting 400 employees out of work.

Of the money owed, $238.6 million is secured, with the largest secured creditor being Fulida Holdings, which is owed $235 million. The province is owed $13.4 million and the municipality of Port Alice is owed $1.8 million.

The company’s lone assets are the land and buildings, which have been deemed to be worth $69,904.

The trustee intends to secure the mill site, sell all possible assets, and remediate and decommission the mill site and its surrounding properties.