FORM 10-Q.-QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Exch Act Rel No. 312905, eff. 4/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended Sept. 30, 1998.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exhange Act of 1934
For the transition period from __________ to __________.
(Amended by Exch Act Rel No. 312905. eff 4/26/93.)
Commission File Number:___0-16289____________________.
__________________Repap Enterprises Inc._____________.
(Exact name of registrant as specified in its charter)
_______Canada__________ ______98-0178526 _
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
300 Atlantic Street, Suite 200_______Stamford, CT, 06901
(Address of principal executive (City, State, Zip Code)
offices)
__________________203 964-6160_____________________
(Registrant's telephone number, including area code)
___________________________________________________
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [ X ]Yes [ ]No
743,460,637 shares of the registrant's Common Stock, no par
value, were outstanding as of the close of business on Sept. 30,
1998.
REPAP ENTERPRISES INC.
INDEX
EXCHANGE RATES
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Interim Balance Sheet
Consolidated Interim Statements of Operations
Condensed Consolidated Interim Statements of Changes in Financial
Position
Notes to Consolidated Interim Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II.- OTHER INFORMATION
Item. 1 Legal Proceedings
Item. 2 Changes in Securities and Use of Proceeds
Item. 3 Defaults Upon Senior Securities
Item. 4 Submission of Matters to a Vote of Security Holders
Item. 5 Other Information
Item. 6 Exhibits and Reports on Form 8-K
SIGNATURES
EXCHANGE RATES
Repap Enterprises Inc. (the "Company") publishes its consolidated financial
statements in Canadian dollars. In this quarterly report, unless otherwise
specified or the context otherwise requires, all dollar amounts are expressed
in Canadian dollars ("$", "C$", "dollars", or "Cdn. dollars").
The following table sets forth the exchange rates to the Canadian dollar to
the U.S. dollar at the end of the year ended December 31, 1998 and the end of
nine months ended September 30, 1998 and 1997 (such rates, which are expressed
in dollars, being the noon buying rates in New York City for cable transfer in
U.S. dollars as certified for customs purposes by the Federal Reserve Bank of
New York). On June 30, 1998, US$1.00 equaled C$1.5262.
Nine Months Year Ended
Ended September 30, December 31,
1998 1997 1997
------ ------ ------------
(C$ per US$)
High . . . . . . . . . . 1.5770 1.3955 1.3357
Low. . . . . . . . . . . 1.4658 1.3690 1.4398
Average (1). . . . . . . 1.4642 1.3772 1.3849
At End of period (2) . . 1.5262 1.3824 1.4288
- --------------------
(1) The average of the daily buying rates during the applicable period.
(2) Noon buying rate on last banking day.
PART I. - FINANCIAL INFORMATION
Item 1. - Financial Statements.
REPAP ENTERPRISES INC.
Incorporated under the laws of Canada
CONSOLIDATED INTERIM BALANCE SHEET (see Note 1)
(unaudited as at September 30, 1998)
(dollars in millions)
September December
30, 1998 31, 1997
ASSETS
Current assets
Cash and short term deposits $ 8.4 $ 43.3
Accounts receivable 65.9 79.9
Inventories 73.0 65.9
147.3 189.1
Fixed assets, net 984.0 1,008.7
Investment tax credits receivable 0.3 35.5
Investments 16.2 16.2
Other assets 195.9 148.4
$1,343.7 $1,397.9
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 147.5 $ 129.0
Current portion of long-term debt
and repayable grants 7.3 75.7
Revolving credit facility 0.0 97.5
154.8 302.2
Revolving credit facility 57.0 0.0
Long-term debt 1,085.6 901.3
Repayable grants and other liabilities 17.2 25.6
1,314.6 1,229.1
CAPITAL SOURCES
Non-controlling interest 0.0 14.3
Investment tax credits 109.8 148.0
Grants-non-repayable 23.0 23.8
132.8 186.1
SHAREHOLDERS' DEFICIENCY
Preferred shares 16.0 16.0
Common shares 640.4 640.4
Deficit (775.3) (745.3)
Other paid-in capital 15.2 71.7
Translation adjustment 0.0 (0.1)
(103.7) (17.3)
$1,343.7 $1,397.9
See accompanying notes
REPAP ENTERPRISES INC.
Incorporated under the laws of Canada
CONSOLIDATED STATEMENTS OF OPERATIONS (see Note 1)
(unaudited)
(dollars in millions)
Third Nine Months Ended
Quarter September 30
1998 1997 1998 1997
Revenues from continuing operations $172.7 $154.4 $504.8 $444.6
Effects of currency hedging 1.2 25.6 4.0 28.5
Net revenues 171.5 128.8 500.8 416.1
Net sales from continuing operations 154.5 115.5 452.7 372.9
Cost of sales before depreciation and
amortization 101.2 100.7 295.7 312.2
Selling, administrative and research
expenses 11.1 21.8 27.6 41.9
Depreciation and amortization 19.6 17.3 50.7 44.1
Operating profit (loss) 22.6 (24.3) 78.7 (25.3)
Interest expense 29.2 29.9 82.6 91.3
Miscellaneous (income) expenses 4.2 (1.3) 5.8 (1.5)
Income (loss) before the undernoted (10.8) (52.9) (9.7) (115.1)
Provision for income taxes 0.8 0.1 2.1 1.3
Income (loss) from continuing operations (11.6) (53.0) (11.8) (116.4)
Unusual charges 0.1 0.0 46.4 0.0
Income (loss) from discontinued
operations (0.5) 121.0 17.2 16.4
Net income (loss) (12.2) 68.0 (41.0) (100.0)
Provision for accretion of other paid-in
capital 0.0 2.8 3.0 12.9
Net income (loss) attributable to common
shareholders $(12.2) $ 65.2 $(44.0) $(112.9)
Average common shares outstanding
(millions) 742.5 527.1 742.5 259.5
(Loss) per share:
Continuing operations $(0.02) $(0.11) $(0.08) $(0.50)
Discontinued operations (0.00) 0.23 0.02 0.06
Total $(0.02) $ 0.12 $(0.06) $(0.44)
See accompanying notes
REPAP ENTERPRISES INC.
Incorporated under the laws of Canada
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (see
Note 1) (unaudited)
(dollars in millions)
Third Nine Months Ended
Quarter September 30
1998 1997 1998 1997
Operating activities:
Loss from continuing operations $(11.7) $(53.0) $(58.2) $(116.4)
Add items not affecting cash:
Depreciation and amortization 19.6 17.3 50.7 44.1
Effects of currency hedging 1.2 25.6 4.0 28.5
Other 0.4 (0.6) 47.5 (0.5)
Cash flow before net changes in non-cash
working capital 9.5 (10.7) 44.0 (44.3)
Non-cash working capital changes 34.7 (6.5) 14.7 38.7
Cash provided by continuing operations 44.2 (17.2) 58.7 (5.6)
Investing activities:
Additions to fixed assets (4.2) (4.6) (12.4) (7.3)
Deferred charges and other assets (4.6) 0.0 (22.8) (2.2)
Cash used in investing activities (8.8) (4.6) (35.2) (9.5)
Financing activities:
Additions to debt 0.5 11.1 522.3 63.9
Repayment of debt (1.6) (279.8) (460.3) (290.7)
Redemption of debentures 0.0 0.0 (75.0) 0.0
Revolving credit facility, net change (34.1) (4.6) (45.5) (22.1)
Other 0.2 0.4 (17.0) 0.8
Cash provided by (used in)financing activities (35.0) (272.9) (75.5) (248.1)
Cash provided by (used in) discontinued
operations (0.6) 304.3 17.1 266.2
Net decrease in cash (0.2) 9.6 (34.9) 3.0
Cash position at beginning of period 8.6 16.9 43.3 23.5
Cash position at end of period $ 8.4 $26.5 $ 8.4 $26.5
Represented by:
Cash and short-term deposits $8.4 $26.5 $ 8.4 $26.5
See accompanying notes
REPAP ENTERPRISES INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Nine months ended September 30, 1998 and 1997
(unaudited)
(dollars in millions)
1. FINANCIAL STATEMENT PRESENTATION
These condensed consolidated interim financial statements
of Repap Enterprises Inc. ("Repap Enterprises") have been prepared by
management in accordance with accounting principles generally
accepted in Canada ("Canadian GAAP"). These condensed consolidated
interim financial statements are the responsibility of management
and, in its opinion, include all the adjustments, which are of a
normal recurring nature, necessary to a fair statement of the
results for the interim periods presented.
Reference is made to the Notes to the Consolidated
Financial Statements which appear in the Repap Enterprises
1997 Consolidated Financial Statements, including Note 1 on "Financial
Statement Presentation". The significant accounting policies disclosed
therein apply to these condensed consolidated interim financial
statements.
As further described in Note 3, the accounting policies followed
by Repap Enterprises differ in certain respects from those that would
have been followed had these condensed consolidated interim
financial statements been prepared in conformity with the accounting
principles generally accepted in the United States ("U.S. GAAP")
and the accounting principles and practices required by the United States
Securities and Exchange Commission ("SEC").
BASIS OF FINANCIAL STATEMENT PRESENTATION AND GOING CONCERN ASSUMPTION
These condensed consolidated interim financial statements have
been prepared in accordance with generally accepted accounting principles
on a going concern basis which presumes the realization of assets
and discharge of liabilities in the normal course of business for
the foreseeable future. Repap Enterprises' ability to continue as a
going concern is dependent upon its ability to achieve profitable
operations and generate positive cash flow on a sustained basis (See
Note 1 to the 1997 Consolidated Financial Statements). The outcome of
these matters cannot be predicted at this time. These condensed
consolidated interim financial statements do not include any
adjustments to the amounts and classifications of assets and
liabilities that might be necessary should Repap Enterprises be unable
to continue in business.
2. INVENTORIES
Unaudited
Sept. 30, December 31,
1998 1997
Raw materials and supplies. . . . . . . . . . . $47.4 $ 45.7
Work in process . . . . . . . . . . . . . . . . 0.9 1.0
Finished goods. . . . . . . . . . . . . . . . . 24.6 19.2
$72.9 $ 65.9
Raw materials include chemicals, chips and logs used in the
production of pulp, paper, and lumber. Work in process and finished
goods include pulp, paper and lumber.
3. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES
The condensed consolidated interim financial statements have been
prepared in accordance with accounting principles generally accepted
in Canada. The following summary sets out the material adjustments to
Repap Enterprises' reported net income (loss) which would be made in
order to conform with accounting principles generally accepted in the
United States and the accounting principles and practices required by
the SEC. For information on the nature of these adjustments, refer to
Note 23 of Repap Enterprises' 1997 Consolidated Financial Statements.
Unaudited
Nine Months Ended
Statement of Operations components: September 30,
1998 1997
Income(loss)from continuing operations before provision
for accretion in paid-in capital in accordance with
Canadian GAAP. $(41.0) $(100.0)
Earnings adjustments:
Add (deduct):
Reversal of revenue-stream hedge 4.0 28.5
Unrealized gain (loss) on translation of long-term debt (37.3) (5.1)
Interest expense on convertible debentures (2.5) (12.9)
Reversal of amortization of investment tax credits 0.0 (4.0)
Adjustments (net of applicable income taxes) Cost of
early redemption of long-term debt 46.4 0.0
Income (loss) from continuing operations before
extraordinary items in accordance with US GAAP. (30.4) (93.5)
Extraordinary items, net of related income taxes (23.8) 0.0
Income(loss)from discontinued operations in accordance
with US GAAP 0.0 54.5
Net income (loss) $(54.2) $(39.0)
Under U.S. GAAP, amounts that remain contingently payable to
the Province of New Brunswick as described in Note 4 of Repap Enterprises'
1997 Consolidated Financial Statements should continue to be recorded as
liabilities until the related contingencies are resolved. As a result,
the gain on settlement of debt included in discontinued operations is
restricted to the amount by which the carrying value of the debt exceeds
the total amount contingently payable.
Unaudited
1998 1997
In accordance In accordance
with GAAP in with GAAP in
Canada U.S. Canada U.S
Balance Sheet components:
Other assets $160.3 $56.3 $148.4 $53.8
Investment tax credits recoverable 0.4 0.0 35.5 0.0
Current portion of long-term debt
and repayable grants 7.3 7.3 75.7 72.4
Convertible debentures 0.0 68.6 0.0 75.0
Long term portion of repayable grants
and other liabilities 21.7 39.5 25.6 25.6
Investment tax credits 109.9 143.2 148.0 146.2
Shareholders' (deficiency) (103.7) (274.2) (17.3) (217.3)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
FINANCIAL REVIEW (IN CANADIAN DOLLARS UNLESS OTHERWISE NOTED)
RESULTS OF OPERATIONS
Repap Enterprises Inc., for the third quarter ended September 30, 1998,
recorded a loss of $12.2 million ($0.02 per share) compared with a net
income of $65.2 million ($0.12 per share) in the third quarter of 1997.
The third quarter of 1998 included a loss from discontinued operations
of $0.5 million compared to a net gain from discontinued operations of
$121.0 million in the third quarter of 1997, reflecting mainly the gain
on the sale of Repap USA and Repap Manitoba Inc.
Excluding discontinued operations, Repap's loss from continuing
operations was $11.6 million for the third quarter of 1998 compared
with a loss from continuing operations of $55.8 million in the third
quarter of 1997.
Shipments in the Company's three product lines were as follows:
Nine Months Ended
Third Quarter September 30
1998 1997 1998 1997
Coated paper (000 tons) 117 113 342 332
Kraft pulp (000 metric tons) 16 21 49 79
Lumber (mmfbm) 13 13 41 44
Revenues from continuing operations for the third quarter of 1998 were
$172.7 million, up 12% from revenues of $154.4 million in the third
quarter of 1997 and up 2% from revenues of $168.8 million in the second
quarter of 1998.
[] Revenues from coated paper were $156.3 million, up $24.5 million
or 19% over the third quarter of 1997 revenues of $131.8
million, reflecting mainly increased pricing, the benefit of
a weaker Canadian dollar compared to the U.S. dollar, and to
a lesser extent, increased shipments.
[] Revenues from pulp for the third quarter of 1998 were $11.0 million,
down by $5.6 million or 34% from the third quarter of 1997
revenues of $16.6 million, reflecting lower shipments and prices.
[] Revenues from lumber were $5.4 million in the third quarter of 1998,
essentially flat with revenues of $6.0 million in the same period
of 1997.
Cost of sales were essentially flat at $101.2 million in the third
quarter of 1998 compared to $100.7 million in the third quarter of 1997.
The modest $0.5 million increase reflects primarily the impact of
increased shipments of paper and higher raw material costs due to a
weaker Canadian dollar, offset in part by the benefit of increased
productivity in the paper operations.
Selling, general and administrative expenses were cut in half, decreasing
by $10.7 million to $11.1 million in the third quarter of 1998 from $21.8
million in the third quarter of 1997, reflecting mainly the benefits of
downsizing of the corporate office.
Repap's operating profit from continuing operations, excluding non-cash
hedged foreign exchange adjustments, ("EBITDA") was $43.4 million for the
third quarter of 1998 compared to an EBITDA of $18.6 million in the third
quarter of 1997 and to an EBITDA of $44.9 million in the second quarter
of 1998. This significant improvement in EBITDA over the third quarter
of 1997 is due primarily to higher prices and shipments for coated paper,
lower administrative costs and improved productivity, offset in part by
lower pricing and shipments of kraft pulp.
Depreciation and amortization increased by $2.3 million to $19.6 million
in the third quarter of 1998 from $17.3 million in the corresponding
quarter of 1997. The increase is due primarily to higher amortization
of deferred foreign exchange losses on long-term debt.
Interest expense in the third quarter of 1998 was $29.2 million
compared to $29.9 million in the third quarter of 1997, reflecting
lower borrowings at the holding company level, offset in part by the
effects of a weaker Canadian dollar.
Revenues for the nine months ended September 30, 1998 were $504.8
million up 14% from the $444.6 million reported for the corresponding
period in 1997, reflecting higher coated paper prices and shipments and
a weaker Canadian dollar. EBITDA for the nine months of 1998 was $133.4
million compared to $47.3 million for the same period in 1997. Repap
recorded a loss of $44.0 million ($0.06 per share) in the first nine
months compared to a loss of $112.9 million ($0.44 per share)last year.
Excluding discontinued operations and unusual charges, the loss for the
first nine months of 1998 was $14.8 million compared to a loss of $129.3
million in the first nine months of 1997. Unusual charges of $46.4
million related to costs associated with the US$320 million refinancing
of Repap New Brunswick Inc.'s First Priority Senior Secured Notes during
the second quarter of 1998.
LIQUIDITY AND CAPITAL RESOURCES
Repap generated $9.5 million in cash from operations in the third quarter
of 1998 compared to a cash utilization of $10.7 million in the same
quarter of 1997. Non-cash working capital changes generated cash of
$34.7 million compared with a cash utilization of $6.5 million in
1997. The cash generated from operations after working capital in the
quarter was used primarily to finance capital expenditures of $4.2
million and to reduce borrowings under the revolving credit facility
by $34.1 million. At September 30, 1998, borrowings under Repap New
Brunswick's revolving credit facility totaled $57.0 million and
unutilized availability was approximately $29.0 million. Repap
Enterprises also had cash on hand of $8.4 million at September 30, 1998.
Total available liquidity was approximately $37.4 million at
September 30, 1998 and reflected the buildup of liquidity prior to the
October 1998 semi-annual interest payment of approximately $29.0 million
related to the 10 5/8% Second Priority Senior Secured Fixed Rate Notes.
OUTLOOK
Kraft pulp markets continue to be weak. Significant downtime
announced by various industry players is helping bring Norscan
inventories down to 1.75 million metric tons at the end of
September from 1.9 million metric tons at the end of August.
However, more reductions are necessary before any recovery in
pricing occurs.
Industry Mill inventories for coated groundwood paper at
September 1998 were 205,000 tons. They were 75,000 tons higher
than one year ago, but still 98,000 tons below their 303,000
ton peak in May of 1996. The same is true for reported
consumer inventories as of the end of August, up 30% from one
year ago.
While total inventories are well below earlier peaks, the rising
trend is not favorable and bears close watching. It should also be
noted that imports continue to rise. Coated groundwood imports are
up 24% year to date compared to 1997. Of the three major consumers
of lightweight coated paper ("LWC"): magazines, catalogs and
commercial printing, magazines continue to enjoy solid growth with
ad pages up 3% and revenues up 8%. Shipments of LWC were up 10.5%
for the first nine months of 1998 to this end use. Catalogs also are
strong while grade substitution continues to negatively impact
commercial printing applications.
In spite of the economic turmoil and paper industry
weakness, third quarter EBITDA was very consistent with the
second quarter and other results were quite satisfactory.
Repap's shipments were up a strong 3% over the second quarter,
our inventory declined to its lowest level in two years, order
backlogs remained stable and the New Brunswick mill continued to
run well with low costs and good efficiencies. Price declines
were moderate and were mitigated by the weak Canadian dollar.
Unfortunately, industry conditions are weakening and we cannot
expect to avoid negative impacts going forward.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
N/A
PART II.-OTHER INFORMATION
Item 1. Legal Proceedings
Except as herein disclosed, there are not material legal
proceedings and there are no proceedings under any environmental
protection laws, which are pending or, to the Company's knowledge,
threatened, against the Company. The Company and its wholly owned
subsidiary, Repap New Brunswick Inc. ("RNB") have been named Respondents
in a petition filed in the Superior Court of Quebec by George S. Petty
Management Ltd., George S. Petty Management II Ltd. and 1211421 Ontario
Inc. Silverton International Fund Limited and Paloma Partners L.L.C. have
been joined as "mis-en-cause". The Petitioners are the owners of all of
REI's issued and outstanding Series C and Series F Preferred Shares and
claim that the proposed amalgamation of the Company and RNB is oppressive,
unfairly prejudicial and unfairly disregards the Petitioners as owners
of those preferred shares. The Petitioners seek, among other things, an
order requiring the Company and RNB to permanently terminate any proceedings
with respect to the proposed amalgamation and an order liquidating and
dissolving the Company. The Company intends to defend the Petition.
The matter has been set for trial on December 1, 2, 3 and 4, 1998.
Item 2. Changes in Securities and Use of Proceeds.
No material changes to the constituent instruments defining the
rights of the holders of any class of registered securities have been made
during the third quarter of fiscal 1998.
Item 3. Defaults Upon Senior Securities.
No material defaults upon senior securities have been made during
the third quarter of fiscal 1998.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during
the third quarter of fiscal 1998.
Item 5. Other Information.
N/A
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
No. Description
11 Statement re Computation of per Share Earnings
27 Financial Data Schedule
b) Reports on Form 8-K.
No current Report on Form 8-K was filed by the Company during
third quarter of fiscal 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REPAP ENTERPRISES INC.
Registrant
Date: November 10, 1998 /s/ Terry W. McBride
Terry W. McBride
Vice President & General Counsel
Date: November 10, 1998 /s/ Michelle A. Cormier
Michelle A. Cormier
Vice President, Finance
EXHIBIT INDEX
Exh. 11.1 Statement Re: Computation of per Share Earnings
Exh. 27. Financial Data Schedule
<TABLE>
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(dollars in millions of Canadian dollars)
(shares in millions)
<CAPTION>
Nine months
Third Quarter ended Sept. 30
1998 1997 1998 1997
<C> <C> <C> <C>
BASIC
Average shares outstanding B25 742.5 527.1 742.5 259.5
Income (loss) from continuing operations (11.7) (55.8) (61.2) (129.3)
Net Income (loss) attributable to common shareholders (12.2) 65.2 (44.0) (112.9)
Basic earnings (loss) from continuing operations per share (0.02) (0.11) (0.08) (0.50)
Basic earnings (loss) per share (0.02) 0.12 (0.06) (0.44)
DILUTED
Average shares outstanding 742.5 527.1 742.5 259.5
Net effect of dilutive stock options (2) 63.2 5.3 63.2 5.3
Assumed conversion of convertible debentures (1) 0.0 0.0 0.0 0.0
805.7 532.4 805.7 264.8
Income (loss) from continuing operations (11.7) (55.8) (61.2) (129.3)
Net Income (loss) attributable to common shareholders (12.2) 65.2 (44.0) (112.9)
Assumed income from proceeds of exercise of options 14.8 1.2 14.8 1.2
Income (loss) from continuing operations 3.1 (54.6) (46.4) (128.1)
Net Income (loss) attributable to common shareholders 2.6 66.4 29.2 (111.7)
Diluted earnings (loss) from continuing operations per share 0.00 (0.10) (0.06) (0.48)
Diluted earnings (loss) per share 0.00 0.12 0.04 (0.42)
- -----------------------------------------
(1) Conversion of the convertible debentures is not assumed in 1998 and 1997 in the computations
because its effect is antidilutive.
(2) Options granted August 29, 1997.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Interim Balance Sheet and the Condensed Consolidated
Interim Statement of Operations and is qualified in its entirety by reference to
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> CANADIAN DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1.5262
<CASH> 8,413
<SECURITIES> 0
<RECEIVABLES> 65,967
<ALLOWANCES> 70
<INVENTORY> 72,963
<CURRENT-ASSETS> 147,273
<PP&E> 1,420,245
<DEPRECIATION> 436,219
<TOTAL-ASSETS> 1,343,700
<CURRENT-LIABILITIES> 154,888
<BONDS> 1,081,095
0
16,000
<COMMON> 640,359
<OTHER-SE> (760,205)
<TOTAL-LIABILITY-AND-EQUITY> 1,343,700
<SALES> 452,624
<TOTAL-REVENUES> 504,814
<CGS> 295,666
<TOTAL-COSTS> 373,959
<OTHER-EXPENSES> 5,768
<LOSS-PROVISION> 2,954<F1>
<INTEREST-EXPENSE> 82,627
<INCOME-PRETAX> (9,730)
<INCOME-TAX> 2,110
<INCOME-CONTINUING> (11,840)
<DISCONTINUED> 17,185
<EXTRAORDINARY> (46,382)
<CHANGES> 0
<NET-INCOME> (43,991)
<EPS-PRIMARY> (0.44)
<EPS-DILUTED> 0
<FN>
<F1>Accretion paid in capital.
</FN>
</TABLE>
