December 16, 2019
Fortress Global Enterprises (TSX: FGE), a Montreal, Quebec-based company engaged in the dissolving pulp business and the renewable energy generation sector, obtained protection under the CCAA on December 16. Previously known as Fortress Paper, the company changed its name in 2018 to reflect its intention to shift away from traditional pulp and paper operations and pursue opportunities in new business segments. The majority of the company's revenues is now derived from the production and sale of dissolving pulp, a product with a variety of commercial applications, including the production of rayon textile fibres. The market for dissolving pulp, however, has not been favourable for the company, with prices dropping from almost $950 USD per ton in 2017 to $640 USD per ton this year. Other factors have also contributed to the company's financial difficulties, including the recent Sino-American economic conflict which is disrupting markets and the garment sector which Fortress serves. In the past three years, the company has lost approximately $246.6 million. In consultation with its senior secured lenders, the company launched a sale and investment solicitation process in August 2019 with the assistance of Houlihan Lokey but to date has failed to receive any indications of interest. With no liquidity to operate in the normal course, the company's senior secured lenders, Investissement Québec (IQ) and Fiera, made an application on the company's behalf for creditor protection. While under creditor protection, it is anticipated that the company's pulp mill will be indefinitely idled while the company waits for market conditions to improve. Concurrently, the company will explore other ways to return to profitability, including potentially modernizing and upgrading its current facilities with the assistance of a new investor. Deloitte is the monitor. Counsel is BCF for the company, McCarthy Tétrault for the monitor, Stikeman Elliott for IQ, Miller Thomson for Fiera, Blakes for International Forest Products and Goodmans for Computershare.