November 11, 2014
Nov 11, 2014. /Lesprom Network/. Lynn Tilton, CEO and owner of Patriarch Partners whose investment funds manage Old Town Fuel and Fiber announced the pending sale of the Old Town pulp mill business to Expera Specialty Solutions in a 363 sale under the federal bankruptcy code. Financial terms of the transaction were not disclosed.
Tilton’s firm purchased the former Georgia-Pacific mill for $19 million in a bankruptcy auction in 2008. Citing high costs and offshore competitors, Old Town Fuel & Fiber indefinitely suspended operations on 13 August 2014.
“It is with a heavy heart that we enter into this sale transaction. We invested millions of dollars fighting hard to preserve jobs and a business so critical to the economic health of this region. In the end, the fuel and energy costs required to operate a non-integrated mill in the Maine climate made this an unsustainable business operation for us.
"We spent considerable time and effort identifying potential buyers with a business model that could sustain the business, and are pleased to have entered into an agreement for this pending sale, which we note is subject to certain conditions and potential overbids that the bankruptcy Trustee is required to seek,” said Tilton.
Tilton further offered, “We are pleased by the considerable support of this transaction by the Governor and U.S. Senators. Critical to Old Town’s future success, however, will be the Governor’s support to promptly provide the necessary permits so that the buyer can resume operations. I encourage our elected officials to find a way to provide funding or other support to reduce the high costs of fuel and energy that make it difficult to sustain this type of business in Maine. My mission of saving American jobs and American companies remains steadfast.”
Dick Arnold, CEO of Old Town Fuel and Fiber, said, “The employees of Old Town deeply appreciate Lynn Tilton’s many years of support, and are particularly grateful for her personally funding our healthcare benefits and the mill’s operating costs during this transition.”
Duane Lugdon, USW Staff Representative, said, "United Steelworkers International Union (USW) is proud to have had a role in achieving the sale of the assets at the Old Town mill to Expera Specialty Solutions. The assets, currently owned by Red Shield Acquisition, a Lynn Tilton Company, will now once again be an important part of the local and state economy by employing over 200 of our members who are, without question, some of the best Pulp makers in the industry.
"History will show that we have had a positive and constructive relationship with Lynn Tilton and Patriarch Partners. They gave the Old Town mill a life again after it was idled in 2008 and we have appreciated the integrity displayed by Lynn throughout her ownership. Whenever she made a commitment to the members of our Union she followed through without exception. We wish Lynn and her Company the very best.
"We also believe that the Expera Specialty Solutions ownership will bring a very strong commitment to the Old Town mill and our members. Expera is a company in the portfolio of KPS Specialty Solutions Funds. We have had a great relationship with KPS elsewhere in the Pulp & Paper industry as well as others throughout the nation. Our confidence in KPS and Expera Specialty Solutions is extremely high as a result of our past experience with them and the depth of commitment they make to the assets they own. We appreciate their willingness to extend their support and expertise in securing the future of the Old Town mill. We look forward to working closely with them to again add value to Maine's outstanding forest resources.”
Old Town Fuel & Fiber (OTFF) is a century-old leader in value-added pulp manufacturing. The company operates from its historic facility on the banks of the Penobscot River in Old Town, Maine.
The company can produce 600 tons of NBHK pulp per day from a mix of northern hardwoods, sourced primarily from Maine forests. OTFF pulp is made of prime quality hardwoods consisting of maple, beech and birch trees. Its high brightness, low dirt and consistency make Penobscot Prime pulp ideal for high quality printing, writing, tissue, text and cover grade papers.
Beyond traditional pulping, the company is implementing a unique design for producing clean energy and biochemicals as byproducts of the core pulp manufacturing process. Old Town is a "technology" company utilizing and leveraging its infrastructure for the conversion of low-cost, woody biomass into clean cellulosic sugars. These high-quality, wood-derived sugars can be used as a feedstock in the production of many valuable biobased products such as biofuels, biochemicals and bioplastics.
Patriarch Partners LLC, is an investment firm managing investments in more than 75 companies across 14 industry sectors. Owned by Lynn Tilton, Patriarch is dedicated to saving American jobs by saving American companies.