The Port of Walla Walla announced today its intention to assist in restructuring a portion of the debt of the de-inked market pulp mill located in Wallula, Washington. The mill is owned by Ponderosa Fibres of Washington, L.P., an affiliate of Ponderosa Fibres of America the largest producer of de-inked market pulp in the world. In 1995, the Port of Walla Walla Public Corporation issued $110 million in nonrecourse industrial revenue bonds, the proceeds of which were loaned to the company to finance construction of the mill. The bonds are payable solely from revenues of the mill and do not constitute a debt of the Port of Walla Walla, Walla Walla County, the State of Washington, or any other municipal government.

The principal economic terms of the proposed restructuring provide for the bondholders to exchange the $110 million in bonds earlier issued, in return for approximately $72.6 million in bonds, and other consideration. Like the original bonds, the new bonds will not constitute a debt of any municipal government.

According to Commission President Ken Jantz, "This restructuring which is subject to various approvals, will enhance the long-term competitive position of the mill and expedite the completion and start up of the de-inked market pulp facility at Wallula. We are pleased Ponderosa has reached agreement in principal with the bondholders for this restructuring plan."

Ponderosa Fibres of America officials noted that the debt restructuring of the Washington facility will not have any impact on operations on its other market pulp facilities.

"Ponderosa has already made a significant contribution to Walla Walla County," according to Jantz. Several hundred people have been employed during construction, $63,674 in building permit fees have been collected and Ponderosa’s first half of 1998 property taxes totaling $554,800 has been paid. The plant currently employs 53 workers.

For more information, contact Jim Kuntz, Executive Director, Port of Walla Walla at (509)525-3100.