FAME grants $1 million loan to East Millinocket, Millinocket paper mills

This shuttered paper mill in East Millinocket and the one in the Millinocket were purchased by New Hampshire investor Cate Street Capital earlier this month. Mill owners announced plans to hire another 225 workers and begin production there and in Millinocket as early as January 2013.
This shuttered paper mill in East Millinocket and the one in the Millinocket were purchased by New Hampshire investor Cate Street Capital earlier this month. Mill owners announced plans to hire another 225 workers and begin production there and in Millinocket as early as January 2013.
Posted Nov. 30, 2011, at 7:41 p.m.

The new Great Northern Paper Co. LLC will make its first property tax payments to East Millinocket and Millinocket shortly thanks to a $1 million loan from the Finance Authority of Maine, officials said Wednesday.

“FAME is pleased to assist Great Northern Paper Co., which is a vital asset to the Katahdin region and to the state of Maine,” Susan Snowden, the new chairwoman of the FAME board of directors, said in a statement released Wednesday. “Our expectation is that the mill will remain competitive on a global basis and continue to employ hardworking Mainers.”

The board approved a direct loan of $1 million during its Nov. 15 meeting in Augusta to help the fledgling papermaker make personal property tax payments due the towns by the end of 2011. The company will pay both towns about $2 million in taxes for the year, company spokesman Scott Tranchemontagne said.

“We found them very easy to work with, very pro-business and very use-friendly,” Tranchemontagne said of FAME. “Clearly, this is a group that really cared about our business and all business moving forward.”

“Sometimes you run into organizations like this where there is more red tape than it is worth. That wasn’t them at all. They demonstrated very clearly that they wanted the project to proceed,” he added.

Gov. Paul LePage announced on Sept. 17 that Cate Street Capital of Portsmouth, N.H., had purchased the two mills on undisclosed terms. The deal was made final on Sept. 28 and the East Millinocket mill restarted on Oct. 17 with 215 workers making the mill’s primary products: newsprint and telephone directory paper.

Though its initial restart was postponed by about a week, the mill had a full year of orders, has added a handful of workers since restarting and continues to meet its deadlines, Tranchemontagne said.

Cate Street leaders applied for the loan in August when they were still assembling financing for the restart with the idea that the loan would provide the company immediate cash to pay its bills promptly without having to press customers for immediate payments for the paper they ordered.

“The beauty of this loan,” Tranchemontagne said, “is that it’s short-term.”

The loan will be repaid in summer 2012, he said.

Created by the Legislature, FAME is an independent state agency that develops and administers programs related to the financing of higher education and business in Maine, according to the state website, maine.gov.

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