Monday, August 02, 2010

Eurocan deposit deadline passes without sale

Published in the Kitimat Northern Sentinel, July 21, 2010.
The July 15 deadline has passed for a non-refundable deposit to be made to West Fraser Timber for the sale of the Eurocan pulp mill in Kitimat.
Though neither the Viability Group or West Fraser Timber would reveal the amount required for deposit, Mary Murphy, member of the Viability Group and president of CEP local 298, confirmed no deposit had been made, "we were not in a position to put a bid on the mill." she said in a telephone interview July 19.
West Fraser Timber Vice-President and Chief Operating Officer Edward R. Seraphim explained, "the deadline of the 15th has passed with the Pöyry process, at this point we haven't received any offers to purchase the mill, so we're going to continue to pursue all avenues that we can."
Murphy is still hoping the Viability Group can go ahead with an investment partner, "we're holding on, hoping we can find someone in the next two weeks."
Murphy revealed both paper machines in the mill are already sold, but not to whom they had been sold.
Seraphim, when asked if West Fraser Timber was still open to sell to the viability group answered, "somebody has to come up with a legitimate offer."
What constitutes a legitimate offer is confidential according to Seraphim.
Seraphim did take a moment to clarify West Fraser Timber's position in the process, "we announced the shut down of the mill nine months ago, it is unfortunate that at this point nothing has transpired, but it has been nine months."
"From my point of view, it's pretty well over," Kitimat Councillor and member of the Viability Group Randy Halyk said, when reached for comment July 16.
"They will go on from here and sell the asset as it happens.  It could take a week, it could take a year or more." Halyk said, relaying a communication from Seraphim to him.
In a July 6 community meeting the Viability Group, CEP and BC Co-operative Association proposed the mill be bought locally and run a single line producing sack kraft based on a March 31 report from Pöyry Forest Industry Consulting.
A trust account was also announced at the meeting for interested people to deposit to so a "substantial investor" could be attracted to co-invest in the closed mill.
Murphy had hoped enough businesses in Kitimat would also step forward as investors, but there was not enough interest to go ahead with the proposal.
After the community meeting, an email sent July 12 gave details of the management structure and how the local community might participate in the mill reopening, and how much individual co-op shares might have cost.
Shares were to have cost $5000 each, community share holders would have been required to have two shares, workers would have been required to hold five shares.
The Eurocan mill closed this Jan with the loss of 535 jobs.

Related Links
Kitimat Northern Sentinel
West Fraser Timber

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