Nexfor Fraser Completes Purchase of GNP

Company looks to focus on producing directory paper.

May 12, 2003

Nexfor Paper completed the acquisition of the idled Great Northern Paper company in Millinocket, Maine. The company had filed for bankruptcy protection this past January.

According to one source, the company, which has changed its name to Katahdin Paper Co. LLC, hopes to begin operation early next month.

Bert Martin, formerly of the Nexfor Fraser Papers Inc., will serve as the paper company's new president as it starts what he described as an "exciting new day."

"We have acquired a pulp and paper facility that we believe can be extremely competitive to provide fantastic products for our customer base and solidify communities in which our employees live," Martin said. "To us, that's very important. We tend to be simplistic people: We're from the north. And we're in business to make money for our owners and we're in business to provide products to customers that they can't get anywhere else."

Legault said Brascan's goal is to turn the bankrupt paper company into a successful business by improving efficiencies and investing about $100 million to position the two northern Maine paper mills to run through the worst of economic times.

According to the Bangor Daily News, the paper mills in East Millinocket and Millinocket will be operated as one complex, and the mills' infrastructure that once supported 17 paper machines will be reconfigured to support the remaining three.

Under the deal, Brascan paid $63.3 million in cash and assumed about $27 million in loans. About $51.5 million of the cash was to pay off a long-term equipment lease Great Northern had with Boeing. The remaining cash from the purchase price goes to Great Northern's bankrupt estate.