The Aditya Birla Group purchased the assets of Terrace Bay Pulp Mill in North Western Ontario through a Special Purpose Vehicle (SPV), AV Terrace Bay Inc (Canada) after the mill was placed under Companies Creditors Arrangement Act (CCAA) in January 2012.
The Terrace Bay Mill will be converted into a dissolving grade pulp mill to provide superior quality pulp for the Group's VSF plants worldwide.
Grasim Industries Limited proposes to hold a 40 per cent stake in AV Terrace Bay Inc and the remaining 60 per cent is proposed to be held by Thai Rayon Public Co. Ltd., Thailand. Over a period of the next three years, Grasim would be contributing $44 million, out of the total equity contribution of $110 million.
The Group is planning to invest more than $250 million in a phased manner to convert the mill to produce dissolving grade pulp with a capacity of 2,80,000 tpa. Until the conversion, which is likely to happen in FY16, the mill will produce and sell paper grade pulp. The paper grade pulp mill should restart by October 2012. The Terrace Bay Mill is considered an anchor mill due to its location and its significant consumption of residual chips produced by the regional sawmills. The transaction is subject to court approvals in Canada and other regulatory approvals in Canada, Thailand and India. It is expected to close by 31 July, 2012.
For further information, go to www.birlacellulose.com