Thunder Bay

Resolute rejects Repap Resources' bid for Fort Frances mill, says it will proceed with redevelopment

Resolute Forest Products has rejected a bid from a private investment group interested in purchasing the shuttered paper mill in Fort Frances, Ont., and says it will turn its attention to redeveloping the site.

Letter from Resolute to Fort Frances mayor says Repap's offer 'fell short'

Resolute Forest Products says it has rejected a bid by a private investment group that was interested in purchasing the Fort Frances mill. (Jeff Walters/CBC)

Resolute Forest Products has rejected a bid from a private investment group interested in purchasing the shuttered paper mill in Fort Frances, Ont., and says it will turn its attention to redeveloping the site.

That was communicated in a letter sent by the forestry giant to Fort Frances mayor June Caul on Monday.

Repap Resources Group said on Friday that it had submitted a "multi-million dollar" offer to purchase the mill and its assets.

Resolute closed the plant in 2014; the company said Repap's offer "fell short on multiple fronts."

Resolute had already signed an agreement with a company that specializes in redeveloping industrial sites in January, according to the letter to the town from Resolute president and chief executive officer Yves Laflamme, but entertained interest from other parties, including Repap. Laflamme's letter said that Repap was the only party to actually submit a bid.

"In spite of our best efforts, Repap did not produce an offer providing us the level of certainty required to move forward with them," Laflamme wrote.

"They failed to provide the required financial deposit, did not mark up the asset purchase agreement, did not address our key requirement to perform environmental remediation and did not produce sufficient, committed financing to move forward."
The Resolute mill in Fort Frances has been closed since 2014. (Jeff Walters/CBC)

Town officials have worried about the future of the property being demolished and sold for scrap, taking with it the potential for hundreds of jobs and the property tax revenue.  That appears to be more likely now, with Laflamme's letter stating that the company is concluding "that a return to manufacturing operations is most unlikely."

"We are now squarely focused on the community development project, which will reposition the Fort Frances
site."

Resolute said that Repap could still conceivably enter into its own agreement with the redeveloper.

"We want the regional economy to prosper, and we must ensure that the Fort Frances site is handled in accordance with all applicable laws, including environmental, and at all levels, including municipal," Laflamme's letter said.

Repap's president, Sean Twomey said that if his group purchased the Fort Frances mill, its operation would create between 600 and 700 jobs in the mill and forestry operations.

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