Troubled N.H. mills reach sale agreement Fraser Papers to buy North Country facilities

CONCORD, N.H. – The owners of two North Country mills that have been idle since August filed a $30 million sales agreement with a Connecticut paper company Friday, the first step in getting the 860 employees back to work.

As part of the bankruptcy court filing in Delaware, the owners would use the money to pay off the mills’ creditors as part of the agreement with the buyer, Fraser Papers Inc. of Stamford.

The mill complex, which was northern New Hampshire’s largest private employer, closed Aug. 12. Pulp and Paper of America laid off its workers and its parent company, American Tissue Inc. of Hauppauge, N.Y., filed for bankruptcy a month later.

American Tissue owns mills in 19 states, but the agreement deals only with the two New Hampshire mills, a pulp mill in Berlin and a paper mill in adjacent Gorham.

The two communities are among the creditors. Between them, they are owed about $5 million in property taxes by the company.

The bankruptcy court routinely still will allow other offers for the mills, which could be more than $30 million. The mill facility and surrounding property in Berlin alone is valued at $70 million, city officials said.

Cascades Inc. of Kingsey Falls, Quebec, and Keating Fibre of Fort Washington, Pa., also had shown interest in the mills. Spokesmen for the two companies did not immediately return calls Friday.

Another bid would have to be at least $1.4 million above the $30 million, court papers say.

Any agreement must get the approval of the bankruptcy court.

“It’s definitely good news because we’ve been on pins and needles for a while now,” Berlin City Manager Robert Theberge said. “Some people wondered that if this thing dragged on, Fraser would just give up.”

Environmental issues that held up the sale process have been resolved, Theberge said. He would not elaborate.

Gov. Jeanne Shaheen called the filing “a major step forward in efforts to reopen the mills.”

“This is a complex project, and we still have work to do before Fraser can take ownership,” she said.

Pulp and Paper of America blamed the August closings of its mills on high energy costs, slack demand for paper and foreign competition. Months later, the industry still faces some of the same problems.

The mill complex has been a staple in Coos County for 150 years, although it has changed hands with increasing frequency. At their peak, the mills employed about 2,000 workers, but modernization and increasing financial troubles led to round after round of layoffs.

H. Winslow & Co. began operation with a sawmill in Berlin in 1852. Brown Co. bought control in 1868 and operated the mill until 1968, when it sold to Gulf and Western.

James River Corp. acquired Gulf and Western in 1980, including the mill complex. Crown Vantage took over the mills in 1995, when they were spun off from James River.

American Tissue bought the mills from Crown Vantage in 1999 for $45 million.