Cellu Converting's winning bid was an all-cash offer of $11.25 for the mill, excluding leased equipment, TheDeal.com reported. Thompson Alliance Group LLC was the only other bidder in a hotly contested bidding process, the site reported.
The sale is expected to close at a sale hearing in U.S. Bankruptcy Court in Wilmington, Del., Aug.14 or 15, sources reported.
Both Cellu Converting and American Tissue had agreed to unbundle the plant from its leased equipment before the final bidding on July 26. Cellu Converting had lowered its initial bid to $5.84 million from $17 million with the exclusion of the leased equipment.
Thompson Alliance countered with an opening stalking horse bid of $6.25 million, the site reported A series of 51 bids were made in $100,000 increments to reach the winning bid total, the site noted.
Cellu Converting will now have to make its own arrangements with the lessors for that leased equipment, an official handling the asset sales noted, the site reported.
Restart plans in motion
Paper, Allied-Industrial, Chemical and Energy (PACE) Workers International Union Local 7-482 has reportedly reached a tentative six-year labor agreement with Cellu Converting to restart the operations, the Appleton Post-Crescent reported.
The agreement includes a plan to rehire former employees to restart the operations as soon as possible, a union spokesperson told the newspaper.
The mill was shut down Feb. 22. The mill has a capacity of approximately 70,000 tons/year of facial and bathroom tissue grades on five paper machines.
Based in East Hartford, Conn., Cellu Converting is the parent company of Cellu Tissue. There are five existing paper mills in the Cellu Tissue organization, including Menominee Paper, Coastal Paper, and Interlake Paper.
Other mill sales
The company still plans to auction its Greenwich, N.Y., tissue paper mill on Aug. 6, TheDeal.com reported.
Atlantic Paper & Foil Corp. of Hauppauge, N.Y., has signed a $1.4 million all-cash, stalking-horse agreement for the Greenwich facility, and no competing bidders have come forward yet.
Officials are still trying to find bidders for American Tissue's last remaining paper mill in Winchester, N.H., the site noted.
The bankruptcy judge refused earlier this month to approve a bid that came in lower than the $250,000 minimum price that the company had set, the report noted. Several parties have reportedly expressed verbal interest but non have submitted a formal offer to date, the site reported. Forestweb