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Repap plans to submit conditional offer to purchase Fort Frances mill

Town of Fort Frances warns Resolute about conditions for mill demolition.
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Resolute Fort Frances winter

FORT FRANCES, ON — The private investment group hoping to reopen the idled pulp and paper mill at Fort Frances intends to submit a purchase offer to Resolute Forest Products this week.

Repap spokesperson Sean Twomey says it will be conditional on receiving a guaranteed supply of fibre to produce the specialty paper—the kind used for cement bags and sugar bags—that Repap proposes to manufacture.

Resolute previously required that any offers before its March 15 deadline must be "binding," but company vice-president Seth Kursman has told Tbnewswatch Resolute agreed to accept non-binding offers to accommodate Repap "and their financing needs." 

In an interview with Tbnewswatch from his New York office, Twomey confirmed Repap still needs to complete financing arrangements for the mill purchase.

Some progress may have been made with regard to a fibre supply, however.

Twomey said his group has now had discussions about the wood supply with the Ministry of Natural Resources and Forestry but "they have not given us any guarantees as yet. They have indicated that they are going to look favourably on our proposal. The ministry has not yet made a clear decision."

Twomey said Repap has made its position clear "directly with the minister [John Yakabuski] and his staff" that a fibre supply must be in place to support the re-start of the mill.

He added that although he believes there is ample fibre in northwestern Ontario to support all existing mill operations in the region, Repap is also looking at additional sources such as recycled material from markets like Winnipeg, Minneapolis and Chicago. 

Resolute has insisted that interested parties sign a non-disclosure agreement, something Repap still has not done. "They never signed an NDA even with accommodations for them on our part," said Kursman. In an email, he referred to the agreement to consider a non-binding offer "and other accommodations" Resolute has made for Repap.

According to Twomey, a variety of solutions for the NDA were discussed but "our lawyers in Toronto advised us not to sign the final document Resolute proposed, because it still prevented any discussion with federal or municipal employees at all, and only allowed discussion with the Ontario government with regard to fibre."  

He also maintained that the NDA would have prohibited discussion with any supplier of financing.

As a result, Twomey said, Repap is preparing its purchase offer based on public sources of information. "We're reasonably confident that we have the basis on which to make an offer at the end of the week," he said.

Town of Fort Frances announces conditions for mill demolition

In the event that Resolute reaches no deal to sell the mill to an operator who would reopen it, the Town of Fort Frances has cautioned the company that it will impose conditions before the buildings are demolished.

In a statement Tuesday, the town said it intends to invoke its "site plan control process" if a demolition company takes ownership of the property.

"We will require any owner, prior to demolition, to provide the town with a line of credit...no less than $20 million, to ensure that the process is completed with minimal impact to our community."

The statement said town administration is also recommending a series of third-party professional studies with respect to historic, engineering and environmental aspects.

The town, it said, will take proactive steps to ensure the industrial sites are aesthetically pleasing, safe, healthy and functional after demolition.

"We understand that our needs to protect this community will cause a proponent to invest significant time and capital upfront...but we believe the best outcome for our community is to hold any redevelopment company to the highest standards."

 

 





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