CONCORD, N.H.— The company running the last surviving paper mill in northern New Hampshire said Tuesday it has terminated its agreement to sell the business and plans to shut down next month after the purchaser couldn’t secure sufficient financing to complete the deal.
Fraser Papers said in a statement that it plans to shut down the Gorham mill, which employs 240 workers, indefinitely on or about Oct. 13, depending on whether acceptable orders can be obtained. The company said the shutdown is due to the current market conditions “and is no way reflective of the outstanding dedication and commitment of the employees at the mill.”
Fraser filed for bankruptcy protection last year in Canada and the United States.
“The company has begun contacting other parties to determine their interest in acquiring the mill,” Fraser’s statement said.
The region is trying to redevelop itself after the loss of its pulp mill industry in nearby Berlin in 2006 and the closing last year of the Ethan Allen furniture plant in neighboring Vermont.
Berlin Mayor Paul Grenier said the news was alarming, disappointing and devastating.
“I was a mill employee who lost their job, and so I know exactly what they’re going through,” he said of the workers.
Grenier was hopeful that the mill would be saved.
“I think there are other parties out there that are willing to operate this mill, that have the equity and are willing to make this happen,” he said.
In May, a Manchester-based investment firm called MerchantBanc announced it was planning to buy the mill. President Jeffrey Pollock confirmed Tuesday that the agreement had fallen through and that he had spoken to the mill workers.
“We worked on this for nine months, and we got to know many people at the mill — management, laborers, many other people who worked there,” he said. “I developed such respect for their character and work ethic.”
He added, “I hope they get an opportunity to succeed because they really do deserve it.”
Pollock said the agreement was contingent on getting a co-investor, and that had been achieved. However, plans fell apart at the end of August, when Fraser was facing a court deadline. The company was given a one-month extension, until Sept. 30, to have a plan in place.
“It just didn’t happen in time,” Pollock said. “That’s why Fraser terminated the agreement.”
The news comes several days after the state gave final approval to a plan to convert the idled pulp mill in Berlin into a wood-fired electric generating plant. The mill was last owned by Fraser.