Final bids in for NewPage mill
Paper Excellence, Stern Partners want to keep paper plant going
The four companies vying for the shuttered NewPage Port Hawkesbury mill submitted their final bids on Friday.
Ernst & Young, the court-appointed monitor handling the sale, said in a statement that four final offers for the mill were received by the 6 p.m. AT deadline.
While two unnamed bidders plan to dismantle the plant and sell the equipment, two others — Paper Excellence Canada Holdings Corp. and Stern Partners Inc. — are expected to run at least one paper-making machine.
The four offers will now be evaluated by NewPage Port Hawkesbury, Ernst & Young and Sanabe & Associates, a New York investment bank. They will select one purchaser by Dec. 30.
The court will then be asked to approve the selection on or before Jan. 20, 2012.
Paper Excellence Canada bought the Northern Pulp operation in Pictou County 18 months ago. Parent company Asia Pulp and Paper has been on a buying spree to feed its operations in Indonesia.
Analyst Kevin Mason said APP is one of the largest companies of its kind in the world.
"APP had a bit of a spotty past but has done a lot to clean up its image. But they still have a lot of lingering PR challenges out there," said Mason, managing director of ERA Forest Products Research.
Greenpeace has accused APP of destroying rainforest.
Government help will likely be requested
Stern Partners Inc. also wants to run the mill in Point Tupper. It owns a chain of newspapers and part of Alberta Newsprint Co., a mill Mason said is efficient and even has a daycare.
"It's always been viewed as a good place to work," he said. "That being said, you know, there have been times he's had to walk away from some assets when the economics don't work anymore."
Mason said Stern closed a plant in the United States.
Union members at NewPage spent one day talking with Stern and one week with Paper Excellence.
Mason said both Paper Excellence and Stern Partners would likely seek government help to reduce power costs as a condition for restarting the mill.
"Nobody can go in and just shovel away money at a losing asset. You've got to make some pretty good concessions to put this thing on a profitable footing to have a hope of survival going forward," he said.
NewPage Port Hawkesbury shut down indefinitely in September, affecting about 1,000 jobs. The company said it was losing money because of rising costs and the high value of the Canadian dollar.