Business New Brunswick Minister Jack Keir says the province has reached an agreement in principle for three loan guarantees worth a total of $50 million for Atcon Holdings Inc.

Keir told the legislative assembly that the proposed deal is broken into three different loan guarantees that will help maintain jobs in the northern city of Miramichi.

"It would be unconscionable for the government of New Brunswick to turn its back on the people of Miramichi at this time," Keir said.

"We are supporting this company in an effort to protect families and the entire region by helping this employer access credit during these extraordinary times."

The deal includes:

• A $20-million loan guarantee to refinance an existing high-interest loan. This loan must be repaid in June 2010.
• A $20-million loan guarantee to increase Atcon Holdings' operating credit, allowing the company to bid on additional projects outside N.B. This loan guarantee must be repaid in 2013.
• A $10-million loan guarantee to complete the expansion of Atcon Industrial Services Centre in Miramichi. This loan guarantee cannot exceed eight years.

The $10-million loan guarantee is to help Atcon finance a steel fabrication facility, which will build components for the $135-million Deh Cho Bridge project in the Northwest Territories.

Last year, the province gave Atcon a $13.3-million loan guarantee to help with the same project. That money allowed the company to meet the minimum criteria for the Northwest Territories government to guarantee the entire cost of the bridge.

Keir said recently that Atcon has created 78 of the 150 jobs it promised.

Loans 'vote of confidence' in Atcon

Robert Tozer, the president and chief executive officer of the Atcon Group, said the new government assistance is critical because of the global economic slump.

“We are pleased the province of New Brunswick has agreed to provide loan guarantees to our companies,” Tozer said in a written statement.

“The global financial crisis severely restrained our access to capital and this investment is a vote of confidence in our companies and in the people of Miramichi and New Brunswick.”

Tozer said his company has 30 years of experience in the province, has an annual payroll of more than $70 million and creates 1,800 direct jobs in the province.

The statement indicated the three loan guarantees will "sustain and build" on its workforce.

'Not a bailout'

Keir stressed in his statement to the legislature that this announcement is not designed to be a "bailout." And when speaking to reporters on Wednesday afternoon, Keir said the Atcon proposal is similar to a homeowner's mortgage because it has to be paid because to the government over a set period of time.

"We've co-signed that mortgage with Atcon. So there's no money leaving hands. So when the opposition stands up like they always do and says, 'You're giving $50 million to Atcon where you could be paying teachers and teachers' aides.' That is just hogwash," Keir said.

"The fact of the matter is there's not one dime going to Atcon. All we're doing is co-signing a loan with them."

The $50 million in proposed provincial funds comes with strings attached.

Keir said Atcon Holdings will establish an external board of advisers with one member appointed by the provincial government. And the company will consult the advisory board on any major business decisions.

Atcon has also committed to provide a payment plan for any outstanding money owed to New Brunswick suppliers. The Opposition Progressive Conservatives said on Tuesday that many small companies have complained to them that they have not been paid for work they performed for Atcon.

The Miramichi-based construction company will not seek or accept subcontracts on projects funded by the province, "excluding the supply of asphalt and aggregate in volumes not to exceed the previous year."

Finally, Atcon will not take on work under public-private partnership contracts held by the Brun-way Group, or any other joint venture involving Atcon companies, without the express permission of government.

Opposition will ask tough questions: Alward

Opposition Leader David Alward said it was important that the provincial government tabled the proposed deal before the legislature adjourned for the summer.

He also said the government made the right decision by making the funding available through loan guarantees and not grants.

Alward said the implementation of an advisory board does not go far enough and he wants more expertise from the departments of Finance and Business New Brunswick overseeing Atcon's corporate dealings.

Alward said the Opposition will not back down from asking tough questions about the Atcon deal.

"We will be continuing to ask to see the conditions of this agreement; we believe it is the right thing," he said.

"We will also have questions on what small businesses that have not been paid by this company, and whether or not they have been paid."