Fraser set to pick up N.H. mills U.S. firm wins bid over Canadian

CONCORD, N.H. – A Connecticut company beat out a Canadian competitor Friday to become the new owner of northern New Hampshire’s idle pulp and paper mills.

Fraser Papers Inc. of Stamford, Conn., will pay $31.5 million for the mills, after a late bid by Cascades Inc. was disqualified Friday morning.

“I think today we’ve taken a significant step forward in getting the mills in Berlin and Gorham operating again,” Gov. Jeanne Shaheen said.

The mills shut down in August, putting 860 people out of work. A month later, the complex’s owner, American Tissue Inc. of Hauppauge, N.Y., filed for bankruptcy protection.

Friday’s action was in New York City. Fraser’s bid faces one final review at a U.S. Bankruptcy Court hearing scheduled for Monday in Chicago.

Even before the shutdown and bankruptcy, the mills’ owner owed Berlin, Gorham and Shelburne millions in back taxes. Officials in those communities have reached a sealed agreement with Fraser about the repayment of those taxes, said Berlin Mayor Robert Danderson.

“All the tax issues are resolved,” said Danderson, who called Friday’s announcement “fantastic.”

Fraser Papers bid $30 million last month. Cascades, based in Kingsey Falls, Quebec, waited until Wednesday’s deadline to bid. But the bid was disqualified because of conditions that were unacceptable to American Tissue, said Assistant New Hampshire Attorney General Peter Roth.

American Tissue also owns a mill in Winchester, N.H., that closed around the same time Pulp and Paper of America did. The Winchester mill is not part of the sale agreement with Fraser.

The mills have anchored the northern New Hampshire economy for 150 years, though they have changed hands with increasing frequency and employment has dwindled.

In a conference call Friday, company and state officials could not say when the mills would reopen or when the first workers would be called back.

“The plan is to close the transaction obviously as quickly as possible,” said Richard Legault, a senior vice president and chief financial officer of Brascan Corp., Fraser’s Toronto-based parent company.

“We will restart the paper machines as soon as possible, understanding that we have to first have the ability to go into the mill and start to sort of assess what is required to do that.”

Legault said the mills’ products will complement those that Fraser already manufactures.

The mill purchase includes six hydroelectric plants, and Legault noted that Brascan is also a large hydroelectric plant operator with 31 plants in Ontario, Quebec, Maine, British Columbia and Louisiana.

“We are very knowledgeable on the hydro front,” Legault said. “So if you take the capabilities we have on the forests side, the capabilities on the power side, I think we bring some substantial skill sets to this particular area and I think that we will be – I’m very confident we will be – very successful in that business.”

Brascan trades on the Toronto and New York stock exchanges under the BNN symbol.

Fraser Papers operates 12 paper machines at three mills and has a facility in Madawaska, Maine. Fraser also manufactures specialty pulp at a mill in Thurso, Quebec.

American Tissue owns mills in 19 states.