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April 15, 2011

Brookfield wants state to buy Katahdin mills

By The Mainebiz News Staff

The owner of the two Katahdin Paper Co. mills in Millinocket and East Millinocket is urging the state to buy them for $1, or else the properties could be disassembled as early as June.

Days after a potential sale to a San Francisco investment firm fell through, Brookfield Asset Management is proposing the state take ownership of the two shuttered mills, according to reports from the Bangor Daily News and the Maine Public Broadcasting Network. Dan Whyte, the company's vice president, said the company is not optimistic another buyer will express interest in the properties, and told the Bangor Daily News "the only other option we have in front of us is decommissioning, and the term sheet says we have until April 29," which is when Brookfield plans to shut down the properties for good. The company is seeking proposals from scrap dealers for the mills' parts, and also plans to sell raw materials. Whyte said the company is losing $1 million a month on the two mills, one of which was shut down in 2008, and the other, shut down in early April due to a wood shortage, remains idled.

State officials have not expressed interest in buying the two mills, but Dan Demeritt, Gov. Paul LePage's spokesman, said Brookfield officials have agreed to delay a final decision on whether to scrap the mills until all stakeholders can meet, according to both news sources.

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