Bidding Process for Fort Frances Mill Gets Nasty
Repap Resources Group has "stirred up a lot of trouble" by going to senior government officials, unions, and media, and making local presentations ahead of entering formal negotiations with Resolute.
By Ian Ross
Feb. 20, 2019 (Northern Ontario Business) - A prospective buyer of the closed Fort Frances paper mill will have “zero” chance of acquiring the property unless it signs a non-disclosure agreement with Resolute Forest Products, said a company spokesman.
Seth Kursman, Resolute's vice-president of corporate communications, called the actions of Repap Resources Group “downright cruel” in unnecessarily raising expectations in the former pulp and paper mill town of the operation reopening.
Any simmering hard feelings in the northwestern Ontario community since Resolute closed the mill in 2014 bubbled to the surface in early February when town officials got word from the company that an agreement was in place to transfer the property to a site redevelopment company that would demolish the mill buildings.
Resolute is running a two-track bidding process for the mill property by taking offers from interested parties — with a March 15 submission deadline — while also signing a “backstop agreement” with an undisclosed “restorative development company” that would remediate the brownfield site. That agreement is expected to close by May, at the earliest.
It's been alarming news for the Town of Fort Frances, which regards the mill as an “irreplaceable” economic asset.
A draft resolution crafted for the Feb. 11 council meeting called on the province to step in and assist any potential new mill operator by freeing up a nearby Crown wood supply that the town claims Resolute has locked up.
Discussion on the resolution was cut short after Resolute threatened legal action against the municipality, claiming the document contained “false, misleading and defamatory statements.”
The resolution will surface again at a Feb. 19 meeting with the town looking to rally regional support.
Just before Christmas, hopes were raised in Fort Frances when Repap, a private consortium of Canadian and U.S. investors, announced its intentions to enter into negotiations with Resolute to acquire the mill and restart it in 2019.
Their proposal involves producing a mix of packaging paper grades and creating 263 mill jobs.
Kursman said Repap Resources Group has “stirred up a lot of trouble” by going to senior government officials, unions, and media, and making local presentations ahead of entering formal negotiations with Resolute.
Kursman said Repap representatives were given a tour of the mill and Resolute management met with them for an hour. But with Repap refusing to sign a non-disclosure agreement, they are ruled out of any property sale process.
“I will tell you, it is not the professional way that we deal with things,” said Kursman.
The full story is available on Northern Ontario Business website:
» Bidding Process for Fort Frances Mill Gets Nasty
SOURCE: Northern Ontario Business (www.northernontariobusiness.com)