The Canadian province of Nova Scotia is negotiating exclusively with Resolute Forest Products Inc., Montreal, Que., Canada, to acquire most of the assets of the shuttered Bowater Mersey Paper Co. Mill in Brooklyn, Nova Scotia, according to reports this week by the Chronicle Herald, Halifax, N.S., Canada. The deal would allow Resolute to make good on pensions for more than 500 former workers at the plant, and could be inked before the end of the year, the newspaper reported.
Resolute had permanently idled the newsprint mill this past June. When Resolute's CEO Richard Garneau was in Brooklyn at that time to announce the mill closure, he said that there were sufficient assets in Bowater Mersey to cover its liabilities. At the time, he indicated they were worth about $120 million, according to the Herald. Sources quoted in the article said that the province believes that the assets will cover a deficit in the pension plan for former employees, which is "at least $60 million."
The province reportedly has hired a national consulting firm to examine the pension and environmental liabilities that may accompany the purchase of Bowater Mersey's assets. The 220,000 hectares of timberlands belonging to Resolute make it the largest private landholder in Nova Scotia.
If the province does make the deal on the other Bowater assets, it won't operate the 24-MW Brooklyn Power Corp. facility Resolute now controls, according to the Herald source. It will "have to figure out a way to dispose of Brooklyn Power to the most sensible producer that can continue to provide that energy to the grid," the source noted.
Resolute has told the province the Bowater Mersey paper mill, if sold, cannot be used to make paper because it would compete with the company's other facilities. The province is talking to other parties that want to use it to conduct research into high-tech fossil fuel alternatives that can be made from wood, the newspaper's source said.
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