State Offered $1 Acquisition of Katahdin Mills in Maine
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Brookfield Asset Management, Toronto, Ont., Canada, and New York, N.Y., USA, is offering to sell the shuttered Katahdin Paper Co. mills at Millinocket and East Millinocket, Maine, USA, to the state of Maine for a dollar under terms of a deal that San Francisco-based suitor Meritum walked away from late last week, according to an AP report this past week. The two mills could be spared from being dismantled if the state chooses to buy them.
The state's acquisition of the mills may be the only way left to save them after Meriturn backed out of negotiations. Meritum was the only potential buyer to step forward over the past two years, d Dan Whyte, VP at Brookfield Assets Management, said in the AP report. "We're planning our next step, cognizant that the state could still step in and buy these assets under the terms of the former agreement," Whyte noted.
Dan Demeritt, spokesman for Gov. Paul LePage, said Brookfield's chairman agreed to delay a final decision until stakeholders meet. In the meantime, the state is scrambling to find another buyer. "The chairman has given the governor a commitment that he would not make a final decision until everyone is in the room to talk about it. We're working off that commitment, looking at the different options. And we're actively seeking another buyer," Demeritt said.
In the AP report, Sen. Olympia Snowe said that she had spoken to a Brookfield official to urge the company not to scrap the mills. "Economic options are limited once critical infrastructure is sold, and whole communities of hardworking families are adversely affected," Snowe said. She added that the state has a history of fighting to find solutions to difficult problems, "and I know we will continue that tradition on behalf of the people of the Katahdin region."
As detailed in the AP report, Meriturn negotiated concessions from labor unions and was attempting to negotiate lower property taxes. It also wanted relief from liabilities associated with an old dump, as well as a commitment to build a biomass boiler to address the high costs of the Millinocket mill's oil-fired boilers. Before ending negotiations, Meriturn had planned to restart the East Millinocket mill earlier this month, providing employment to 450 paper workers. It also planned to reopen the Millinocket mill, which shutdown in 2008.
The AP photo below show the Millinocket mill on March 8.
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