Government loan to Kruger to hit $110M
Kruger putting up Deer Lake power plant as collateral
The provincial government loan to Corner Brook Pulp and Paper is going to be more than the $90 million contained in last spring's budget.
Finance Minster Tom Marshall told CBC Wednesday that the final amount is going to be $20 million higher.
"There was 90 million dollars put in this budget, because it was anticipated that that would be the amount drawn down this year," said Marshall.
"But it's not just a $90 million loan. It will be $110 million."
Marshall said Kruger Inc. is putting up the Deer Lake hydroelectric plant as collateral for the loan.
He said lawyers and officials from government departments, Nalcor and Kruger are working on the final details of the contract.
Marshall said the industry has gone through a tough time.
"There still will be newspapers in the world. The low-cost mills are the ones that are going to survive, and we think, based on discussions with Corner Brook Pulp and Paper, they can be a survivor — and if they aren't, the taxpayers will get their money back."
Meanwhile, Corner Brook Mayor Charles Pender said he couldn't be happier that government has followed through on its loan to Kruger. The aid was contingent on the mill signing new contracts with its unions.
"Well, we're absolutely elated," said Pender.
"I mean, this is wonderful news that the unions have signed off on all the agreements — and now that Kruger can access the $90 million loan from government — things will move forward, and brighter days are ahead of us."