PORTLAND, Maine — Verso Corp. announced it sold four hydroelectric generators near its Androscoggin mill in Jay to a New Jersey energy investor for $62 million in cash.
Verso announced Thursday it sold subsidiary Verso Androscoggin Power LLC to Eagle Creek Renewable Energy LLC as part of the troubled papermaker’s plan to restructure and improve cash flow.
“The sale of [Verso Androscoggin Power] is expected to have no impact on the operations of the Androscoggin mill,” the company said in a news release. “The mill purchased electricity from [Verso Androscoggin Power] before the transaction, and it will continue to do so with [Verso Androscoggin Power] now under Eagle Creek’s ownership.”
Last year, Eagle Creek purchased a dam connected to Verso’s shuttered mill in Sartell, Minnesota.
The Sun Journal reported that two of the hydropower facilities changing hands are in Jay, one is in Livermore and a fourth is in Livermore Falls. The facilities, with about 30 megawatts of capacity, are not connected to the power grid.
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Verso, which purchased its larger competitor NewPage for $1.4 billion last year, has faced challenges since then. In its November earnings statement, Verso said it was considering bankruptcy or selling off certain assets, including the Androscoggin Mill.
The Jay mill employed about 865 people last year, with 300 layoffs that began last year and will continue through the first quarter of 2016.
Verso said it would continue to own and operate its cogeneration facilities that consist of two recovery boilers, a biomass boiler, three steam turbines and three gas turbines and remains connected to the grid as a customer of Central Maine Power Co.
The company earlier this year petitioned state utilities regulators to have its 40-year-old recovery boiler classified as a new renewable resource under the state’s purchasing requirements for renewable power. That requirement sets out separate goals for purchasing from existing renewable sources and new renewables.
The company argued to the Maine Public Utilities Commission that its $8.15 million investment in the boiler qualifies it as a new resource and that the biomass-derived “black liquor” fuel qualifies as a renewable source. The company is still seeking that classification for its boilers.
Verso said the sale would not cause any interruption to production at the Jay mill. It said both parties entered into a purchase agreement and closed the sale at the same time.