FORT FRANCES, ON — Just three days after Repap Resources submitted a written offer to purchase and restart the Fort Frances pulp and paper mill, Resolute Forest Products has turned it down.
In a letter Monday to Fort Frances Mayor June Caul, company CEO Yves Laflamme said "the Repap bid fell short on multiple fronts."
Repap announced Friday it had submitted a conditional offer for the idled mill, but Laflamme's letter stated "Repap did not produce an offer providing us the level of certainty required to move forward with them."
Laflamme said Resolute had made numerous accommodations in response to Repap requests, such as "a specific carve-out for conversations with the Provincial Ministry of Natural Resources and Forestry, and even allowed the submission of a non-binding vs. binding offer," but:
They failed to provide the required financial deposit, did not mark up the asset purchase agreement, did not address our key requirement to perform environmental remediation, and did not produce sufficient, committed financing to move forward. In addition, their refusal to agree to treat Resolute’s information on a confidential basis prevented them from accessing sufficient information to inform their bid and put forward a responsive offer.
Laflamme said Resolute is now squarely focused on concluding arrangements with a company he described as a restorative redevelopment company specializing in the "revitalization of distressed industrial properties."
He added that this "does not preclude Repap from entering into their own discussions with the redeveloper."
According to Laflamme, he expects the redeveloper—as yet unnamed—will make a public announcement about its plans within several weeks.
Community leaders in Fort Frances have worried since the beginning of the process that the mill would eventually be torn down.
Anticipating that outcome, Fort Frances last week announced that it plans to invoke a site plan control process if a demolition company takes ownership of the mill.
The town will demand a line of credit, prior to demolition, of at least $20 million to ensure demolition happens with minimal impact on the community.
It will also require a series of third-party professional studies pertaining to historic, engineering and environmental aspects.
Fort Frances councillor 'not surprised' by Resolute's rejection
Douglas Judson, a town councillor who's been outspoken in his criticism of Resolute's handling of the disposition of the mill, said he's "not entirely surprised" by its rejection of Repap's pitch, but added "certainly it's a disappointment."
Judson noted that the town has received signifcant support from the provincial government in recent weeks, "including last week when Minister Rickford announced that wood fibre from the Crossroute Forest would be made available" to a new mill operator that could get the mill restarted this year.
Judson said that since the commitment to provide wood rights wasn't made until later in the process, he wonders "if that did factor into the decision."
However, he also questioned whether the bidding process established by Resolute in early February provided enough clarity and enough time for interested parties.
"The deadline was about a month later. For a number of significant players in this industry to consider their options, collect the requisite data, and participate, that's a very tight timeline," Judson said.
He insisted the Resolute announcement "isn't the end of the line" for the town's efforts to save the mill but acknowledged that some members of the community will be "distressed" upon hearing the news.
Twomey, of Repap, has not responded to the Repap announcement as yet. He told Tbnewswatch early Monday afternoon that he had yet to see a copy of it.