OLD TOWN, Maine — A deal is in the works for the sale of Old Town Fuel & Fiber, which closed its pulp mill in mid-August and laid off about 180 workers.
“We’ve been working hard trying to get investors. It’s not a done deal yet,” Rosaire Pelletier, forest products industry liaison for the Maine Department of Economic and Community Development, said Monday evening.
“Everything is in the works right now. We have buyers for those assets but it’s not a done deal. It’s a very complicated deal,” he said, adding that environmental permit transfers and a number of legal issues need to be worked out, among other things.
“Were hoping, of course, for all three of the mills we’ve got down in Maine (in Old Town, East Millinocket and Bucksport). We just want to get them all going. The governor is working hard to get these things going again,” Pelletier said.
Pelletier did not have a time frame for closing the deal.
“You always hope that it’s going to be sooner rather than later but it’s going to happen. I feel that the Old Town mill is a good asset. It’s a pulp mill. They can generate hardwood kraft and softwood kraft. They were also looking at biofuel,” he said.
“So it’s a good asset. Definitely there’s people looking at it. But at the end of the story, it’s never done until it’s done,” he said.
The company blamed foreign competition and increasing wood and energy costs for the shutdown, which affected about 180 employees. In a subsequent release, the city of Old Town said the mill’s owner, New York-based private equity firm Patriarch Partners, planned to sell.
Lynn Tilton, owner of Patriarch Partners, concentrates on turning around failed manufacturing operations. Tilton’s firm purchased the former Georgia-Pacific mill for $19 million in a bankruptcy auction in 2008.
A representative for Patriarch did not return a request for comment Thursday about the timeline for a sale or prospects for a new buyer.
The statement from Old Town thanked Patriarch for investing in the mill and says city leaders will strive to find a buyer.
“The city has faced this situation before, and we will keep moving forward,” the city said at that time. “The city will work with the mill and state officials to try and find a new buyer and keep Old Town moving forward in a positive direction.”
Pulp and paper jobs in Penobscot County have been on a steady decline in recent years, down from about 2,500 in early 2001 to about 839 at the end of 2014, according to statistics from the Maine Department of Labor. While jobs have dropped, average weekly wages in that industry have risen, up to $1,160 at the end of 2013.
Maine Economic and Community Development Commissioner George Gervais said in a statement last summer that the state was hopeful operations can continue in Old Town.
“Our primary goal is to get this mill back up and running as quickly as possible,” said Gervais. “The Old Town mill remains a very valuable asset. We are optimistic, that as we move forward, the facility will be able to attract additional private investment so that operations can resume.”