Newtown Falls Mill Deal Is Dead
The mystery bidder who offered $2.1 million for the idled Newton Falls Fine Paper Mill is not buying the plant after all.
According to the property's owner, Scotia Investments of Nova Scotia, the sale has fallen through.
On Thursday, the mill's equipment was supposed to be sold at an auction in Syracuse.
However, a bidder swooped in and bid $2.1 million to buy not just the equipment, but the entire property as well.
The move was interpreted as good news because it indicated a new owner might be interested in reopening the plant.
However, Scotia Investments Senior Vice President Robert Patzelt tells 7 News that his company was advised the next day that the deal was dead.
He says Scotia will contact the other high bidders from the auction to see if they're still interested in buying the equipment.
If they're not interested, the inventory will be sold elsewhere, said Patzelt.
Patzelt declined to name the mystery bidder who offered to buy the plant intact.
"The owners are disappointed with this development as they put tremendous time and effort into selling the entire mill which was seen to be in the best interest of all the stakeholders and especially the mill and the community. Ideally, we wanted the mill to be sold as a going concern or, in its current state of being ready to be reopened by another party," Patzelt said in a prepared statement.
Scotia took ownership of the mill in 2007.
Close to 100 workers lost their jobs when the mill stopped operating in 2010.
The following is a statement from Scotia Investments:
The owners of Newton Falls Fine Paper, Scotia Newton Inc., are proceeding with the difficult decision to sell the assets of the mill. At an auction Thursday, March 21, 2013, a special bid was received for all of the assets of the mill that would potentially have allowed the mill to be reopened by a new party. However, in the process of finalization of the details, Scotia Newton was advised the next day (Friday March 22, 2013) that this transaction would not proceed.
The owners are disappointed with this development as they put tremendous time and effort into selling the entire mill which was seen to be in the best interest of all the stakeholders and especially the mill and the community. Ideally, we wanted the mill to be sold as a going concern or, in its current state of being ready to be reopened by another party.
We respectfully accept this outcome. The owners will proceed with the disposition of the remaining assets in an orderly manner. Since Scotia Newton Inc. took ownership of the mill in 2007, it has been run and maintained in full environmental compliance. The remaining employees are helping as the orderly liquidation proceeds.
The owners of Scotia Newton Inc. are grateful to government and IDA partners, former employees and community members for their support; we have tried to find the best possible solution for the mill and for the community of Newton Falls. Unfortunately, and after much effort and continued investment in trying to find a solution, we have concluded that we simply cannot continue on this unsustainable path.
Late last summer, the mill's owners shifted focus and efforts (of more than a year) from securing an equity partner for the mill to finding a buyer. Scotia Newton Inc. had run the mill from 2007 to 2010, having purchased and restarted it (after it sat in a state of idle for a four year period prior to our purchase). For the past 27 months, the mill and its machinery has been preserved in a state of readiness (hot idle) and a core team of ten people has been employed on site managing the process, conducting tours with interested parties and ensuring the mill and site is secure.
Since December 2010, Scotia Newton Inc. has spent more than $10M on NFFP operating costs plus additional sums on capital upgrades and debt service. In addition, during the past 27 months Scotia Newton Inc. has vigorously pursued any and all potential operators for the mill. This search was conducted on a global basis by a highly qualified liquidation firm, which undertook an intensive marketing program targeted at potential buyers.
Statement attributable to Robert Patzelt, Senior Vice President, Corporate Development, Scotia Investments Limited (SIL)