Agreement reached

A Montreal company has signed a conditional purchase agreement to buy the shuttered Atikokan Forest Products Ltd. mill from the Buchanan Group.

Eacom Timber Corp. executive vice-president and chief financial officer Marc Girard on Tuesday said they’ve reached a deal with court-appointed receiver PricewaterhouseCoopers, an agreement that also includes acquiring assets from the former Northern Sawmills Inc. plant in Thunder Bay.

“In the case of the Northern sawmill, what we’re talking about is essentially buying equipment. Whereas in the case of Atikokan we’re talking about buying the sawmill itself,” Girard said.

According to the Montreal Gazette, the transaction will be financed with proceeds garnered from the company’s recent $34.6 million private placement.

But it’s by no means a done deal, Girard cautioned.

First and foremost it hinges on the ability to secure timber rights from the province of Ontario.

Minister of Northern Development, Mines and Forestry Michael Gravelle said he couldn’t comment on forthcoming wood allocation, and neither confirmed nor denied Eacom was on the list of successful contestants.

“Certainly it’s very difficult for me to speak about anything related to the wood supply competition until we are able to make specific announcements,” Gravelle said. “I can tell you in relation to Atikokan Forest Products that I had an opportunity to sit down with (Atikokan) Mayor (Dennis) Brown and members of council and I know that there’s a great interest in continuing the possibility of resumption of an operation there.

“We are certainly working with the community as closely as we can, recognizing that indeed the wood supply for Atikokan Forest Products was part of the wood supply competition process that was underway.”

Girard said there are other factors that will come into play before the deal is finalized.

“Just like any other transaction, it’s subject to a formal due diligence as well as a third-party approvals, as well as court approval because this is part of an insolvency process,” Girard said.

Girard would not disclose any financial figures associated with the deal.

Eacom Timber Corp. owns seven sawmills and equity interest in an eighth. Included among their Ontario holdings are mills in Timmins, Gogama and Ear Falls.