As talks continue about an overseas bid to purchase Catalyst Paper, the company announced June 30 that its four largest shareholders have decided to give Kejriwal Group International their backing.

Catalyst owns Crofton mill.

These “principal security holders” control approximately 79 per cent of Catalyst’s outstanding common shares and, according to a release from Catalyst have filed appropriate papers with the United States Securities and Exchange Commission setting out the details of a support agreement.

“The support agreement has been entered into between KGI and the Principal Securityholders following previously disclosed discussions. [Catalyst] is not a party to the support agreement, nor has it been a party to the discussions that led to it,” the release stated.

These big shareholders “have committed to support and vote in favour of a transaction to be implemented by way of a plan of arrangement under the Canada Business Corporations Act,” Catalyst said.

Under this agreement, common shares held by minority shareholders would be acquired for $6 CDN per share. Common shares held by the principal securityholders would be exchanged for interests in a new junior convertible term loan.

Those holding existing loans that are due in 2017 will have the chance to exchange these for interests in a new five-year $260.5 million U.S. term loan while other financing arrangements would be extended or refinanced with trade and other obligations remaining unaffected, Catalyst said.

Any possible move forward must involve the refinancing, and the securing of official approvals plus “satisfactory due diligence by KGI to occur over a period of up to 75 days.”

The support agreement wants to see the transaction completed by Nov. 30.

Catalyst’s board of have “not yet entered into any discussions regarding the potential transaction with KGI or agreed to the contemplated process and timeline set forth in the support agreement. The board of directors is encouraged by KGI’s proposal and will be pleased to review and evaluate the proposed transaction and the process contemplated by the support agreement with the assistance of legal and financial advisors,” Catalyst’s release stated.

The pulp and paper company also made the disclaimer that at this stage there is no assurance that any agreement at all will be entered into between KGI and Catalyst, let alone what terms might be involved.