Published on: 3/29/2012 2:04:26 PM Print | Font Sizes:  Normal Text Large Text

St. Marys sale approved

By: Northern Ontario Business staff

The sale of shuttered St. Marys Paper in Sault Ste. Marie has been approved by an Ontario court.

On March 26, authorization was given for the sale to numbered company 2319839 Ontario Inc., which has been described by manager and receiver Ernst & Young as “a consortium of companies including an auctioneer, a real estate development company, a metals recycling company and a forest products company.”

The receiver understands that the purchaser may potentially seek to redevelop the mill into a biomass facility with a cogeneration plant while liquidating the mill assets,” reads Ernst & Young's report.

In the court's approval and vesting order, it is noted that legal representation for SMS Energy-Engineering Inc. was on hand for the proceedings. The Oakville-based company is described as a specialist in the area of power generation technologies such as cogeneration.

The mill's assets are being sold on an “as is, where is” basis and include the inventory, machinery, equipment and furniture; the real property, including improvements and fixtures; and the mill's rights to wood supply. It does not include the mill yard wood.

Under the transaction, Ernst & Young is tasked with trying to get the Ontario Power Authority agreement transferred to the new owners. The agreement, which was announced by Sault MPP David Orazietti in 2010, is for a 10-year, 30-megawatt biomass-fuelled cogeneration plant, which, at a cost of $175 million, would be the first of its kind in Ontario.

Originally, the plan called for the plant to fuel operation of the mill, with any surplus energy being sold back to the grid.

It was estimated the construction of the facility would employ 400, while the plant would employ 30 workers and the collection of biomass fuel would employ another 125.

Also as part of the sale, employment of all current mill workers will be terminated the day before the closing date. The mill employs roughly 300 employees.

The closing date is slated for 10 business days following the approval of the sale.

comments powered by Disqus