JAY — Town officials, business owners and community members expressed optimism Tuesday that the sale of the Androscoggin paper mill will be a positive move for the people and economy in the region.

The Androscoggin paper mill employs about 500 workers and is being sold to Pixelle Specialty Solutions LLC based in Spring Grove, Pennsylvania. Andree Kehn/Sun Journal Buy this Photo

The Verso Corp. is the town’s largest employer with about 500 workers.

It and another Verso mill in Wisconsin are being sold for $400 million to Pixelle Specialty Solutions LLC based in Spring Grove, Pennsylvania. The sale is subject to post closing costs, according to a statement from Verso, headquartered in Miamisburg, Ohio.

Verso’s announcement Tuesday follows one earlier this year that the company planned to invest millions in the Jay mill.

“I am very happy to hear Pixelle Specialty Solutions is buying the mill and hopefully they will invest in the mill and the area to make it more prosperous for all of us,” Jay Selectperson Tom Goding said.

Town Manager Shiloh LaFreniere said the town welcomes Pixelle to the community, which had a population of 4,851, according to the 2010 Census.

“It is our hope that they will continue to invest in the Androscoggin Mill,” she said. “As a company whose focus is specialty paper, we are confident this will be a good fit for them and for the dedicated employees here. We look forward to working with the company in a collaborative way that is beneficial to the company, the employees and our community.”

Jay Town Manager Shiloh LaFreniere hopes Pixelle Specialty Solutions continues to invest in the Androscoggin Mill. Andree Kehn/Sun Journal Buy this Photo

Pixelle is one of the largest specialty paper producers in terms of annual production in North America. The purchase, which is expected to be completed in the first quarter of 2020, will establish Pixelle as the largest specialty papers business in the U.S., according to a statement from the company.

“I am happy for the area and I hope the mill keeps growing,” Bob Berry, president of Main-Land Development Consultants in Livermore Falls, said after hearing from a mill representative about the sale.

Other business representatives are hoping for the same.

Lynn and Matt Brennick, owners of My Dad’s Place in North Jay, said hopefully this is a solid move for the mill employees, the mill, businesses and people of the town.

Lynn Brennick, co-owner of My Dad’s Place in North Jay, is optimistic about the sale of the Jay paper mill. Andree Kehn/Sun Journal Buy this Photo

The Professional Logging Contractors of Maine issued a statement of support for the announcement.

“The Androscoggin Mill, which has increased production under Verso in the past year, is a major consumer of wood supplied by hundreds of Maine loggers spread across much of the state, and its continued health is vital to the health of the logging industry,” the organization’s executive director, Dana Doran, wrote in a news release.

“We are optimistic that this sale will both strengthen and provide a bright future for the Androscoggin mill and the many family logging businesses in our state that depend on it as a market for Maine wood, particularly softwood pulp,” Doran wrote. “Our members are very supportive of our paper mill partners and workers, and the mills are vital to our industry. We applaud Verso for finding a buyer that appears committed to the future of the mill, and Pixelle Specialty Solutions for the confidence their decision to buy the mill shows in the strength of Maine’s workforce, especially the harvesting and trucking suppliers.”

“I think this is great,” Franklin County Commission Chairman Terry Brann said. “I think it is an expansion for the company and it keeps the place open. This is a good thing. It is a viable company already.”

The sale was unanimously approved by Verso’s board of directors and is subject to approval from the company’s stockholders and others, according to Verso’s release.

After completing the transaction, employees at both mills and a certain number of Verso’s commercial and manufacturing support employees will transfer to Pixelle, according to Kathi Rowzie, vice president of communications and public affairs for Verso.

Jay assessing agent Paul Binette valued the Androscoggin mill at $325.7 million in August when calculating the tax commitment for 2019-20. It was valued at $292 million in 2018-19. Prior to downsizing, the mill and associated equipment was valued at more than $800 million.

The increase in valuation from last year to this year is because of Verso’s investments.

The mill has more than $55 million in equipment and environmental exemptions, leaving Verso to pay taxes on $270.2 million this year, plus the company can apply to the state for reimbursement for business equipment taxes, Binette said. It is likely Pixelle will apply for these same exemptions next year, he said.

Jay finished paying a $4 million settlement to Verso in 2018-19 for an overvaluatation and tax dispute for 2013, 2014 and 2015.

At one time there were more than 1,200 employees at the Jay mill. International Paper Co. sold the Androscoggin Mill in 2006 as part of a package mill deal to CMP Holdings LLC, a subsidiary of Verso Paper Holdings LLC, an affiliate of Apollo Management L.P. for about $1.4 billion.

The community has seen the mill at its peak and as it downsized its workforce and production over the past several years. In 2015, Verso announced it was shutting down the No. 2 paper machine and a pulp dryer and permanently eliminating 300 jobs. In 2017, it announced it would permanently shut down the No. 3 paper machine and layoff 190 workers to reduce papermaking capacity by about 200,000 tons. In February 2018, it announced it would restart No. 3 machine and hire 120 workers.

Verso Corp. and 26 subsidiaries filed voluntary petitions in January 2016 with the U.S. Bankruptcy Court in the District of Delaware to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

It successfully emerged in July 2016 after restructuring debt, which company representatives said was necessary to strengthen the company’s balance sheet and to position Verso for long-term success.

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