Catalyst Paper has received the necessary creditor approval for its second amended plan of arrangement under the Companies Creditors Arrangement Act in Canada. Approval of more than 99% of secured and unsecured creditors was received. Under the new plan, the company’s secured bondholders will own almost all of the equity in the company.

“With the cooperation of employees, vendors, customers, pensioners and investors, Catalyst has been able to make progress through a very complicated situation at an unprecedented swift pace,” said president and CEO Kevin J. Clarke.

“We’re now turning our attention to securing our exit financing and satisfying the remaining conditions of the plan with a target timeline to emerge from creditor protection in the near term.”

Catalyst also received confirmation of regulatory approval from the provincial government of its proposed modifications to its salaried pension plan. The company estimates that it will save some $7 million annually with implementation of these modifications.

According to the Vancouver Sun on June 25, Clarke says when Catalyst emerges from creditor protection it will have trimmed its debt, and has achieved stronger co-operation with the communities in which it operates and with its union. Catalyst has a low-cost management structure and efficient mills, Clarke adds.

The Sun reports that Catalyst is expected to emerge from creditor protection in September. Its secured bondholders will be its owners – they agreed to swap $390 million in notes from for $250 million in new notes plus 96% of the equity in the restructured company.