Potential buyers meet and greet at Millinocket, East Millinocket mills

A snowmobiler passes the dormant Millinocket paper mill early Wednesday afternoon. Meriturn Partners, a San Francisco investment group, recently signed a tentative agreement to buy the Millinocket and East Millinocket paper mills. Principals of the group met with mill, union and town officials Wednesday.
A snowmobiler passes the dormant Millinocket paper mill early Wednesday afternoon. Meriturn Partners, a San Francisco investment group, recently signed a tentative agreement to buy the Millinocket and East Millinocket paper mills. Principals of the group met with mill, union and town officials Wednesday.
Posted Feb. 16, 2011, at 1:16 p.m.
Last modified Feb. 16, 2011, at 9:04 p.m.

Meriturn Partners officials visited paper mills in East Millinocket and Millinocket that the San Francisco investment group hopes to purchase by April 29, if certain conditions are met, as part of a whirlwind series of meetings that will conclude by Friday.

The meetings, Meriturn partner Lee C. Hansen said, are informal get-to-know-you sessions that would be followed in a few weeks with more detailed sessions aimed at securing conditions under which Meriturn would buy and operate the two mills for an undisclosed price.

“We will have more details as the process continues,” Hansen said. “We are very impressed with the management team, and I haven’t seen anything yet that concerns me.”

Hansen and his colleagues toured the closed Millinocket mill Wednesday morning and were at the East Millinocket mill by noon Wednesday. They met with millworkers and their union representatives during an afternoon session.

Hansen was polite, but said that he and his team would prefer a few weeks of looking over the prospective purchases before discussing them further.

Hansen announced Monday that Meriturn had signed a letter of intent to acquire the mills if several conditions are met. The conditions include arrangements to establish a biomass cogeneration facility at the Millinocket mill to relieve the mill of its expensive dependence on oil, set property taxes — and seek tax breaks — with local municipalities and finish environmental and commercial reviews begun in December.

The deal’s deadline is April 29. If completed, it would restore as many as 150 full-time manufacturing jobs at the Millinocket mill plus dozens more to help operate and supply a new biomass boiler that will relieve the mill of its costly addiction to foreign oil that forced its closure in September 2008, state officials said.

Hansen plans to return to his office in San Francisco on Friday, he said.

Millinocket Town Manager Eugene Conlogue briefed the Town Council on Tuesday that Meriturn and the mill’s current owner, Katahdin Paper Co. LLC, will be seeking significant property tax breaks as part of their efforts to sell the mill.

“The town will apparently be approached about adjusting the taxable value of the mill, although the details of that are totally unknown as this is written. I do have a meeting with Meriturn officials Thursday morning, but this is likely only a brief introductory session. The council may need to meet on the possible abatement re-quest after we receive some preliminary [information] about what the company is actually looking to do,” Conlogue wrote to the council in an e-mail on Tuesday.

“Coming right in the heart of the town’s budget season, [the requests] will add extra pressure for all of us to resolve not only the new budget, but to also work with Meriturn on their issues that will likely have a direct impact on the FY2012 budget,” he added.

Conlogue was in Bangor on business for most of Wednesday, town officials said.

Gov. Paul LePage’s spokesman, Dan Demeritt, said that Meriturn will meet in Augusta with commissioners from the Maine Department of Environmental Protection and from the Maine Department of Conservation on Thursday to discuss particular aspects of the letter of intent and potential sale agreement.

LePage also will meet with Meriturn “to discuss the more general details of the agreement and see what ways the [LePage] administration can help move the process forward,” Demerrit said.

Meriturn specializes in redeveloping industrial sites and manufacturers. According to its website, meriturn.com, Meriturn specializes “in middle-market, corporate restructurings and turnarounds. We invest in basic industries [(manufacturing, distribution, services, etc.]”

The company typically handles companies with $30 million to $250 million in revenue, businesses based in North America and financial institutions with more than $500 million in assets, the website states.

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