Greenfirst to distribute $10.7M from pension surplus

Executive Summary

• Greenfirst Forest Products has secured a $19-million backstop on existing standby letters of credit from Export Development Canada (EDC) to maintain access to working capital.
• The company received regulatory approval to distribute surplus assets from a closed defined benefit pension plan, retaining an estimated $10.7-million to strengthen its financial position.
• These developments are intended to enhance liquidity, financial flexibility, and operational capacity for continuing operations.

Key Details

• Pension Surplus Distribution:
  • Received regulatory approval from the Financial Services Regulatory Authority of Ontario (FSRA).
  • The closed defined benefit pension plan for Kapuskasing Organized Employees of Greenfirst Forest Products (QC) Inc. was wound up on November 1, 2024, in a surplus position.
  • Greenfirst retains the remaining estimated surplus of approximately $10.7-million, subject to final investment performance and plan wind-up expenses.
• $19-Million Backstop:
  • Secured a $19-million backstop on existing standby letters of credit.
  • Provided by Export Development Canada (EDC) under the Account Performance Security Guarantee (APSG) program.
  • The APSG program provides guarantees to financial institutions to help eligible Canadian companies maintain access to working capital.
• Strategic Impact:
  • The combination of the retained pension surplus and the EDC backstop provides additional financial flexibility.
  • Supports continuing operations and the execution of strategic initiatives.

Notable Quotes

• "We appreciate EDC's support through the APSG program. This arrangement, together with the retained pension surplus, provides additional financial flexibility as we continue to manage our operations and serve our customers." — Joel Fournier, Chief Executive Officer