Negotiations continue on two fronts to save Katahdin mills

Posted June 14, 2011, at 9:05 p.m.

AUGUSTA, Maine — Investors who recently bought a Baileyville mill were

negotiating Tuesday to purchase two Katahdin region paper mills even as lawmakers and LePage administration officials scrambled to win support for a bill deemed critical to the potential sale.

Dan Whyte, vice president of Brookfield Asset Management, the current owner of the two Katahdin Paper mills, told the Bangor Daily News that talks “are in progress” to sell the facilities to International Grand Investors Corp. of Delaware for $1.

Part of a Hong Kong-based holding company, IGIC is a company registered for business in Delaware that represents international investors in pulp trade and imports.

If the sale goes through — and parties stressed Tuesday that nothing was final — it would be IGIC’s second major mill acquisition in Maine since September, when the firm purchased the former Domtar pulp mill in Baileyville for $64 million.

Adrienne Bennett, spokeswoman for Gov. Paul LePage, declined to comment on possible ongoing negotiations but said the administration is optimistic about finding a new buyer for the mills.

Rep. Herbert Clark, D-Millinocket, said that he had heard that IGIC was among the

investors interested in possibly buying the mills and that its representatives

visited the mills Tuesday.

Meanwhile, Clark was part of a feverish lobbying effort in the State House on Tuesday aiming to build support for a landfill sale that the proponents insist is crucial to a potential mill deal and, therefore, the fate of up to 600 jobs.

“There will be no deal with a potential buyer without the landfill bill,” Millinocket Town Manger Eugene Conlogue said Tuesday while waiting for lawmakers to take up the measure. “This is a very important bill if the Katahdin region is going to remain economically viable.”

Located in East Millinocket, the Dolby landfill is a sticking point in negotiations over the two mills for prospective buyers that do not want to be saddled with the financial and environmental liability of operating, maintaining and eventually closing the landfill.

Gov. Paul LePage proposed a bill, LD 1567, that would allow the state to purchase and continue operating the nearly fully Dolby landfill, removing a potential obstacle to saving mills that have been the region’s economic backbone for generations.

The Senate gave the bill initial approval on Monday. But questions remain about whether supporters can garner the two-thirds majority needed in both chambers to send the measure to LePage’s desk.

Democrats and some Republicans have raised serious concerns about the state assuming the environmental liability of an aging landfill. They also point out that the current bill contains no guarantees that a new buyer will preserve or create jobs at the mill.

On Tuesday, bill sponsor Sen. Thomas Saviello, R-Wilton, was busily working with Senate Democrats on an amendment to address those concerns. That amendment would cap the state’s liability at $17 million and hand ownership of the landfill back to Brookfield if the sale ultimately falters.

But time is running out for the bill as lawmakers aim to wrap up the 2011 legislative session this week.

Underscoring the sensitivity and uncertainty surrounding the bill, Conlogue and about a half-dozen representatives from the Katahdin region scrapped their other plans on Tuesday after getting a call from the governor’s office. Instead, the group traveled to Augusta to talk with legislators.

Meanwhile, mill workers and families back in Millinocket are closely watching developments in Augusta.

“I hope the legislature does the right thing,” said Duane Lugdon, a United Steelworkers Union representative. “It’s important to put these people in that region back to work.”

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