Baton Rouge, Louisiana, USA, 12 April 2010 – A Florida company has agreed to pay USD 9.9 million to take over the closed Renew Paper
mill near St. Francisville, Louisiana, according to news reports from The Advocate of Baton Rouge, The Natchez Democrat, and the Associated Press.
U.S. Bankruptcy Judge Douglas Dodd, who ordered a court-supervised auction, said he would enter a sale order Monday, clearing the way for Amzak Capital Management LLC to take control of the mill and 610 acres of property within two weeks.
Amzak would be eligible to reopen the site after the sale, but the firm wouldn’t pinpoint a time frame, saying in court documents it will rehire 150 to 200 people and keep current management in place. Allen Byrd, chief executive officer for the mill ownership, said the mill could reopen within a matter of weeksrather than months. A reasonable restart could be accomplished within 30 days following a sale and authorization from the new owner, he said. “Nothing has really been dismantled or mothballed,” Byrd said. “It’s a matter of getting the people back and doing some identified projects.”Despite the bankruptcy reorganization, state officials are eager to bring the paper mill back into operation.
“Paper mills have a massive economic impact,” said state economic development Secretary Stephen Moret, citing a Louisiana State University economic analysis showing that for 200 jobs created at Renew Paper, another 800 jobs would be created in the regional economy.
Amzak financed West Feliciana Acquisition's USD 16 million purchase of the mill in 2009. In 2001, Tembec Inc. of Canada paid USD 185 million for the same site, plus additional acreage. But by 2006, Tembec had lost USD 200 million on the operation and closed it a year later.
Tembec found a buyer in New York-based PanAmerican Capital LLC, which reopened the plant in July through a subsidiary, West Feliciana Acquisition LLC. The operating company filed for bankruptcy reorganization in January because of a dispute with its contractor, Fluor Enterprises Inc.
The mill, which once employed 200, closed in February, leaving behind a maintenance staff of 14.
The Advocate of Baton Rouge said that Amzak managing partner Scot Fischer refused to say when the mill might reopen. But a company purchase agreement says the new owner plans an eventual payroll of 150 to 200 employees.
The state, which provided an incentive package for Renew Paper, has a secured claim for a USD 2.1 million loan, including interest, Moret said. The sale should cover that, he said.
Moret said improving paper market conditions should give Amzak a better chance of success and perhaps an expanded payroll.
"We're optimistic that if they're able to restart successfully, we may be talking about more than the initial forecast they made," Moret said.