Potential buyer of mills to meet with LePage aide

By Nick Sambides Jr., BDN Staff
Posted July 12, 2011, at 12:35 p.m.

EAST MILLINOCKET, Maine — Katahdin region businessman Galen Hale said Tuesday he will meet one of Gov. Paul LePage’s senior advisers Wednesday to discuss his proposal to revitalize the region’s two paper mills.

Senior Economic Adviser John Butera contacted Hale and will meet with him at the State House to review Hale’s sale and revitalization plan a week after Hale announced some details of his plans to the Bangor Daily News.

“I am pleased that they got back to me. I think it was because of some pressure due to the article,” Hale said. “I don’t think they are taking me seriously yet, but that’s OK. When I present my plan, maybe they will take me seriously.”

LePage spokeswoman Adrienne Bennett confirmed the meeting on Tuesday.

Hale, a Millinocket resident and Medway native, owns a Medway retail store and an East Millinocket scrap metal salvage operation and is a longtime businessman in the region. He said said he doesn’t mind any skepticism about his proposal.

He acknowledged that he doesn’t much resemble the multinational corporations that have so far been courted by the Baldacci and LePage administrations as potential mill owners.

But Hale has 31 years of experience working at the Main Street and Millinocket paper mills and said he has received tentative approvals from financial institutions that would back his plan, if the mills pass a due diligence review that the financiers would help complete.

“I think that my plan is more realistic than some of the bigger companies’,” Hale said.

His plan would be to restart the East Millinocket mill’s No. 6 paper machine, which would employ 100 workers; optimize the mill’s steam and power production; and then restart the steam facilities in Millinocket, he has said. It would take four to six months to restart No. 6.

Restarting East Millinocket’s No. 5 paper machine would be next, with the possible restart of Millinocket’s No. 11 machine after that, he said.

A former union president, Hale said he would welcome workers as independents or as members of their own standalone union, with profit-sharing and production bonuses, but would rather not deal with national or international unions, to make his mills as much of a family operation as possible.

Efforts to sell the mills to a Delaware-based corporation, International Grand Investors Corp. of Delaware, owners of a mill in Baileyville, have apparently run into snags, including an apparent lack of wood or wood priced low enough to make a sale of the mills viable. The Legislature agreed to purchase a former mill landfill that was one major impediment to a deal, officials said.

Several local officials and others close to the deal, including Mark Scally, chairman of the East Millinocket Board of Selectmen, said that haven’t heard in several days or weeks the status of the state’s efforts to engineer a sale between IGIC and the owners of the mills, parent company Brookfield Asset Management of Toronto.

Rumors of another company entering negotiations have so far seemed to prove unfounded.

The Main Street paper mill in East Millinocket closed on April 1, idling as many as 450 workers. Its Millinocket sister mill closed in September 2008, laying off about 150 workers. State Department of Economic and Community Development officials have been working to find another owner to run the two paper mills sinceMeriturn Partners, a San Francisco investor, dropped its attempt to buy both for $1 in April.

Disassembly of the two mills is due to start on or sometime after July 31. LePage announced the decommissioning date in late April, saying that Brookfield Asset Management had granted the state a final extension of its original decommissioning deadline to allow officials more time to find a buyer.

http://bangordailynews.com/2011/07/12/business/potential-buyer-of-mills-to-meet-with-lepage-aide/ printed on September 21, 2014