Resolute Forest Products has declined an offer from Repap to acquire the Fort Frances paper mill.
In a letter sent to Mayor June Caul earlier today, Resolute president and CEO Yves Laflamme said the bid from Repap “fell short on multiple fronts.”
“Over the past two months, Resolute made a number of accommodations to support Repap’s requests,” he wrote.
“For example, we provided a specific carve-out for conversations with the provincial Ministry of Natural Resources and Forestry, and even allowed the submission of a non-binding vs. binding offer.
“In spite of our best efforts, Repap did not produce an offer providing us the level of certainty required to move forward with them,” Laflamme stressed.
“They failed to provide the required financial deposit, did not mark up the asset purchase agreement, did not address our key requirement to perform environmental remediation, and did not produce sufficient, committed financing to move forward.
“In addition, their refusal to agree to treat Resolute’s information on a confidential basis prevented them from accessing sufficient information to inform their bid and put forward a responsive offer,” he added.
“Resolute has basic conditions, applied equally to this project and all other transactions.”
Laflamme went on to state that after four years, and upwards of $35 million invested in the site here and the latest process, “a return to manufacturing operations is most unlikely.”
“We are now squarely focused on the community development project, which will reposition the Fort Frances site,” Laflamme wrote.
“Having said that, Resolute proceeding with the redeveloper does not preclude Repap from entering into their own discussions with the redeveloper,” he noted.
“Our guiding principles remain: environmental stewardship and community benefit.
“The redeveloper is a restorative development company, specializing in the integrated revitalization of distressed industrial properties,” Laflamme noted.
“By leveraging public and private funding, they invest in large-scale industrial projects in North America,” he explained. “The redevelopment company has experience leading decommissioning, site recovery and restorative site development, achieving important long-term gains for regional municipalities, public and private investors, and various partners.
“In the next several weeks, we anticipate the community development company and its potential partners will make a public announcement,” Laflamme added.
“It is our understanding that in the interim, they will be reaching out to you, various government ministries, and interested partners.
Laflamme said in order to respect the company’s commitment to environmental stewardship and community benefit, Resolute must ensure the Fort Frances site is passed on to a successor that has sufficient financial resources and is experienced with such an undertaking and capable on delivering on its commitments.
“We want the regional economy to prosper, and we must ensure that the Fort Frances site is handled in accordance with all applicable laws, including environmental, and at all levels, including municipal,” he noted.
“Over the past few years, Resolute built on our commitment to the Northwestern Ontario region, investing over $250 million,” Laflamme said. “Almost 1,000 Resolute employees call Northwestern Ontario home and many thousands more are linked to our operations.
“It is, therefore, important to us to build on our relationships, not see them deteriorate in the public discourse.”
The letter concluded with Laflamme expressing a desire “to work together [with the Town of Fort Frances] in a constructive and collaborative way over the coming months in the best interests of the region.”