New frontrunner signs letter of intent to acquire Tembec's idled former joint venture pulp mill site in Marathon, Ontario, after earlier potential buyer bows out, citing province's stringent financial conditions related to environmental cleanup
May 27, 2014
(Industry Intelligence Inc.)
– There is a new potential buyer for the site of Tembec Inc.’s idled joint venture pulp mill in Marathon, Ontario, which is heavily contaminated and requires extensive environmental cleanup, Northern Ontario Business reported May 23.
The new frontrunner, Reliance Developments Corp., has signed a letter of intent with Tembec. Reliance Developers also bought Superior Fine Papers Inc.’s former paper mill in Thunder Bay, Ontario, and it is cleaning it up as required by the Ontario Ministry of Environment (MOE).
The previous potential buyer of the Marathon site, U.S. redeveloper Green Investment Group Inc. (GIGI), bowed out after reaching the final stages, citing stringent financial requirements by the MOE that it said made the project not viable, Northern Ontario Business reported.
The MOE has final say on any sale agreement for the Marathon property, and any potential buyer must provide financial assurance to cover any environmental work.
MOE had required GIGI to post C$4.8 million, plus an additional C$2 million, but it did not do so on time, effectively killing the deal, Northern Ontario Business reported.
As well, Tembec posted C$4.8 million to the Crown for site remediation, which will be returned to it once the ministry signs off on the cleanup.
A demolition crew hired by Tembec will soon begin tearing down some of the buildings.
The Marathon mill has been shuttered since 2009 following its bankruptcy.
The primary source of this article is Northern Ontario Business, Sudbury, Ontario, on May 23, 2014. Click here to view full version of primary source's original article.