Repap to submit conditional offer for Fort Frances mill

March 14, 2019

By: The Working Forest Staff

FORT FRANCES, ON —Thunder Bay News Watch — 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.

According to a report by Thunder Bay News Watch, 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.

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