Cate Street Capital Acquires Katahdin Mills, to Re-Start East Millinocket in October
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This past Friday, September 16, the shuttered Katahdin paper mills in Millinocket and East Millinocket, Maine (USA), were purchased in escrow by New Hampshire investor Cate Street Capital, with plans to restart both facilities and employ as many as 250 workers by mid-October. Brookfield will remain the mills' owner until the deal is finalized later this month. The closing in escrow allows Cate Street to operate the mills while the company awaits the transfer of environmental permits from Brookfield that legally cannot occur until September 27.
According to reports by the Bangor Daily News (BDN), Maine Gov. Paul LePage's office announced the creation of the new Great Northern Paper Co. with Cate Street Capital as parent company. Great Northern is expected to employ up to 250 workers in East Millinocket, which has been idled since last April, and may hire as many as 500 between it and the Millinocket mill over the next two years. The company said it plans to invest $20 million - $25 million in the east Millinocket mill.
The 250 or so workers hired in East Millinocket starting next week will help it fill already-placed orders from a European customer for virgin newsprint by October 30. Market conditions will dictate restart of the Millinocket mill, which closed in September 2008, idling 150 workers.
Reactions to the late-Friday deal were flowing in by the weekend, the BDN reported. U.S. Sen Olympia Snowe was among the first to proffer congratulations, calling the sale "a seminal moment for the Katahdin region."
Rep. Mike Michaud, a former papermaker at Great Northern Paper in East Millinocket, noted that "we have a proud tradition of papermaking in the region that has been around since my father and grandfather worked in the mills. So many in this region have worked hard to bring it back, and despite the sale and the announcement of hires, there are many that remain without work. While this isn't a solution to all of our challenges, it's clearly an important and positive step in the right direction that we can work to build on moving forward."
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