Would-be mill owner unfazed by closure notice

Posted Feb. 22, 2011, at 9:20 p.m.
Last modified Feb. 23, 2011, at 2:35 a.m.

EAST MILLINOCKET, Maine — The prospective new owner of the Main Street paper mill sought to reassure its customers of the mill’s viability as its present owner filed a notice Tuesday warning of the mill’s closure on April 22.

Per federal law, and as company officials had promised, Katahdin Paper Co. LLC parent company Brookfield Asset Management of Toronto issued a Worker Adjustment and Retraining Notice, which provides a 60-day warning of a closure, on Tuesday.

The notice states that the company intends to close its Millinocket and East Millinocket mills in 60 days and lay off all employees if its transaction with an affiliate of Meriturn Partners LLC fails to occur. Meriturn announced on Feb. 14 its intention to buy the mills, if several conditions are met.

The action brought a statement from Lee C. Hansen, managing member and co-founder of Meriturn.

“We understand KPC’s need to issue the notice at this time, but it in no way diminishes our dedication to this transaction and the goal of ensuring the viability of both mills by making Katahdin Paper a premier manufacturer of paper,” Hansen said Tuesday. “Meriturn is diligently working to meet the required conditions and take ownership of these mills.”

The deal deadline is April 29.

Jeffrey C. Dutton, president of Twin Rivers Paper Co., a subsidiary of Brookfield Asset that manages the two mills and runs several other papermaking operations in Maine and Canada, said the notice period could be extended if the deal isn’t quite set, but that the mill would close if the deal falls apart.

“We can’t continue to operate the mill with its current cost structure. It is a business reality that we find ourselves in with the Katahdin business operations,” Dutton said Tuesday. “Meriturn certainly has some very solid ideas for the mill. Our interest is obviously to have a smooth transition to Meriturn. We will work hard to see that the transition is smooth.”

The federal Worker Adjustment and Retraining Notification Act requires employers to provide a 60-day notice of covered plant closings and covered mass layoffs.

The Millinocket mill has a 180,000-ton-a-year supercalendered paper machine capable of producing paper for catalogs, magazines and retail industry fliers. It has been closed since September 2008, when its burning of oil to make steam for papermaking became too expensive.

The East Millinocket mill is an integrated pulp and paper facility that has two paper machines that can produce 250,000 tons a year of uncoated groundwood papers for directory, catalog, book, insert and newsprint.

Both companies intend to close the deal before April 22, Dutton said, but it’s too soon to say exactly when that will occur. Dutton and Hansen declined to discuss the specifics of the deal.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Business