Tembec announced recently that it has secured additional financing in the amount of $27.8 million to fund a portion of the Temiscaming , Quebec, specialty cellulose Cogen project.
In particular, Tembec has entered into an additional loan in the amount of $17.8 million with Investissement Quebec ("IQ") and has entered into an amended and restated credit agreement with Integrated Private Debt Fund III LP ("IPD"), as Agent for the Project's senior lenders, increasing its credit facility by $10 million. This additional $27.8 million in loans increases the total Project financing to $132.8 million.
Both the IQ Loan and the IPD Loan remain subject to the satisfaction of certain customary closing conditions, including the granting of new security for the loans.
To the end of August 2013 , the company has spent $131 million on the Project, which has a total estimated cost of $235 million .
The project involves the replacement of three low-pressure boilers with a single new high-pressure boiler designed to burn waste sulphite liquor generated by the specialty cellulose manufacturing process. The project also includes the installation of a new 50-megawatt electrical turbine. The completion of the boiler portion of the Project is scheduled for April 2014 and the start-up of the turbine should occur in September 2014.
The company anticipates that the project will improve annual adjusted EBITDA by approximately $48 million.
