Pope & Talbot's Oregon mill to idle

Pope & Talbot is in the process of shutting down its pulp mill in Halsey, Ore., which employed 180 as recently as February.

The bankrupt wood products company said Tuesday it will close its two remaining pulp mills in British Columbia after a deal to sell the mills fell apart and its creditors declined to extend the company additional financing.

At a bankruptcy hearing Wednesday, the company said it would also idle the Oregon mill. The court extended the company's bankruptcy protection for two days. It will return to court Friday and Saturday.

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The company said suitors have emerged for each of the mills.

Pope & Talbot (Pink Sheets: PTBT), a 160-year-old wood products company, filed the third-largest bankruptcy in state history in November after fighting a losing battle with the slumping housing market, a strengthening Canadian dollar, and high debt levels.

In order to secure an emergency $89 million loan, the company subsequently agreed to sell all of its assets by mid-February.

At the time of its bankruptcy, the company had eight mills, including the three pulp mills.

Deals for four of the company's mills have already closed.

An agreement to sell the pulp mills in Nanaimo and Mackenzie, British Columbia, and Halsey fell apart Friday. The company had planned to sell them to PT Pindo Deli for $105.3 million. PT Pindo Deli is a subsidiary of Asia Pulp and Paper, which is owned by Sinar Mas Group of Indonesia, Asia's largest paper producer.

The British Columbia mills that are set to idle employ around 800, according to Canadian news reports.

PT Pindo Deli, in a separate deal, has also agreed to buy Pope & Talbot's Fort St. James sawmill in British Columbia for $6 million. That sale has not closed, but the companies continue to negotiate.