St. Marys Paper's supercalendered paper mill in Sault Ste. Marie, Ontario, would be scrapped if sold to a numbered company selected by the court-appointed monitor, says union official; court approval of the sale expected

LOS ANGELES , March 26, 2012 () – A numbered company selected by the court-appointed monitor to buy St. Marys Paper Corp.’s supercalendered paper mill in Sault Ste. Marie, Ontario, would “chop it up,” said a union official, reported The Sault Star on March 26.

A Toronto court was expected to approve the sale to 2319839 Ontario Inc. on March 26, the newspaper reported.

There has not been any sign of interest in restarting the mill, said Kim Ginter, Ontario regional VP of the Communications, Energy and Paperworkers Union of Canada (CEP), which represents 300 workers at the mill.

One of the conditions of the sale is that the mill’s workers are terminated the day before the deal closes, reported The Sault Star.

In the event that the mill is used for any forestry-related business, the CEP seeks to ensure that its members are given first consideration for any jobs. In the past 10 to 15 years, more than 10,000 jobs have been lost in Ontario due to paper mill and sawmill closures, said Ginter.

Ernst & Young Inc., the court-appointed monitor for the sale, called the transaction “fair and commercially reasonable,” and said it “is in the best interests” of the creditors, according to court documents.

CEP members are not likely to receive any of the more than C$10 million they are owned in severance and vacation pay by St. Marys, said Ginter, The Sault Star reported.

However, Service Canada is expected to inform workers this week about their eligibility for as much as C$3,500 each under the Wage Earner Protection Program.

St. Marys’ biggest creditor is its owner, International Forest Products, which is due C$7.6 million and supports the sale. The purchase price offered by 2319839 Ontario Inc. was not revealed, reported The Sault Star.

The new owner is expected to receive a cogeneration agreement negotiated between St. Marys Paper and Ontario Power Authority ahead of a C$175-million cogeneration plant project that was never undertaken.

The development of that project is something local authorities would support, said Sault Ste. Marie MPP David Orazietti.

The province of Ontario lent St. Marys Paper C$25 million and only C$8 million was repaid when the company went into receivership Dec. 20, 2011, The Sault Star reported.

The primary source of this article is The Sault Star, Sault Ste. Marie, Ontario, on March 26, 2012.

 

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