St. Marys Paper in Sault Ste. Marie has secured a purchaser, and approval for the sale of the paper mill will be sought this Thursday, March 22 in a Toronto courtroom.
The purchaser is identified as numbered company 2319839 Ontario Inc.
As part of the agreement, all St. Marys employees are to be terminated effective the day before the sale's closing date. Employees are to be informed via registered mail. The mill currently employs roughly 300.
A motion prepared by Ernst & Young additionally requests confidentiality of the purchase price to “protect the confidential and commercially sensitive nature of that information and to protect the integrity of any future marketing of the purchased assets by the receiver in the event that the transaction, if approved by this court, does not close as expected.”
According to the motion, “the transaction is fair and commercially reasonable and is in the best interests of the creditors of St. Marys,” and the receiver is recommending the deal go forward. The primary secured creditor, International Forest Products (IFP), is also in support of the transaction.
St. Marys Paper went into receivership Dec. 29 at the behest of IFP, and Toronto firm Ernst & Young was appointed by the court as manager and receiver of the mill.
The mill has been shuttered since last April, when, in a letter to employees, management said repairs were being made to its No. 5 supercalendar paper machine, and indicated efforts were being made to recapitalize the operation.
A financing partner was being sought out to construct a co-generation plant for the mill, and a July startup date was cited. However, the mill never reopened.
