NewPage sale: financial aid promised, waiting on tax ruling
August 21, 2012 By Pulp & Paper Canada
With the announcement of a financial aid package from the provincial government and approval of a deal with Nova Scotia Power, the pieces are falling into place for Pacific West’s purchase of the idled NewPage Port Hawkesbury mill in…
With the announcement of a financial aid package from the provincial government and approval of a deal with Nova Scotia Power, the pieces are falling into place for Pacific West’s purchase of the idled NewPage Port Hawkesbury mill in Point Tupper, N.S.
The one remaining hurdle is approval from the Canada Revenue Agency for a part of the deal with Nova Scotia Power, and for the new owner to “use $1 billion of accumulated losses by the previous owner against its taxes,” according to a report on CBC.ca, Aug. 20.
The Nova Scotia government has promised a $124-million financing deal for the Pacific West purchase, to help the Vancouver-based company restart the Cape Breton mill.
“We have indeed done everything we can to keep this sector of our economy healthy, functioning and oriented toward the future,” said Premier Darrell Dexter, the Chronicle Herald newspaper reported.
“We are confident that Pacific West is well-positioned to be the most competitive and best supercalendered paper mill in the world. The mill has the most modern machine in North America and we’re helping position it to take advantage of this and become a leader.”
The province, through its Jobs Fund, is providing a financial package that includes:
— a $24-million loan to support improved productivity and efficiency;
— a $40-million repayable loan for working capital to help the mill become the lowest cost and most competitive producer of supercalendered paper;
— $1.5 million to train workers;
— $1 million to implement a marketing plan to sell the Nova Scotia forestry sector to the world.
Through the Department of Natural Resources, the provincial government has also agreed to invest:
— $20 million to buy 20,800 ha (51,500 acres) of land;
— $3.8 million annually, for 10 years, from the forestry restructuring fund to support sustainable harvesting, forest land management, and fund programs that will allow more woodlot owners and pulpwood suppliers to become more active in the management of their woodlands;
— funding for the development of a Mi’kmaq Forestry Strategy and a Mi’kmaq Forestry Co-ordinator.
The government has already spent $31.4 million maintaining forestry activities in the area and keeping the mill in a hot idle state since the former owner closed it last September, the Chronicle Herald reported.
The newspaper states that Pacific West is hopeful the ruling will be made by mid-September. Dube said the mill plans to start bringing back workers on a staggered schedule near that date. Pacific West’s offer is to buy the paper mill for $33 million.
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