Hefler Lumber (Hefler Forest Products Ltd.) in Middle Sackville has been given an extended deadline to deal with the restructuring of their business. Source: The Chronicle Herald
Lumber giant Hefler Forest Products is using a $1-million line of credit to cover its operational expenses during a reprieve granted to it by the Supreme Court of Nova Scotia.
Earlier this month, Justice Glen G. McDougall gave Hefler until Sept. 22 to restructure its business, and the judge also ruled the company could borrow up to $1 million from Allen MacPhee during that period.
“We requested a loan and got three offers,” Frank Gaetz, Hefler Forest Products’ president and co-owner, said in an interview Monday.
“It’s like a line of credit. You take what you need.”
The iconic company has been in business since the year before Confederation. It now owes more than $30 million to four secured creditors and another 30-40 unsecured creditors.
But roughly $15.6 million of that is owed to Gaetz and the other owners. The banks are only owed about $12.5 million.
Last month, Gaetz said he was looking for an investor to take over the company’s debt in exchange for a controlling interest — or just sell the business outright. Monday, the Hefler co-owner said negotiations are underway but the details are not being divulged.
“The most interested of the parties are looking to get 67 per cent of the equity and pay off the banks,” said Gaetz in late July.
The company is turning a profit, he said then. Sawmill production has jumped from 12,000 board feet per day in 2013 to 62,000 board feet per day now, and all that product is being sold. Hefler also provides the biomass for its 3.1-megawatt power plant daily and all that electricity is sold on contract to Nova Scotia Power.
The company had $26.5 million in hard assets, $600,000 in receivables and roughly $1.75 million in logs on its site in late July.