Saturday, May 03, 2008

Harmac Deal with APP is Dead

Deal to Buy Harmac Mill Dies
The deal to buy Harmac Mill in Nanaimo has fallen through as Asian Pulp and Paper has pulled out of the deal at the eleventh hour.

The local press reports the Asian company gave no reason for their decision but the speculation is either they are trying to squeeze out a better deal, or were unsuccessful with financing attempts.
Apparently APP defaulted on $14 billion in loans in 2001, which may be why acquiring finances now, in tougher economic times is difficult.

The reason of course is purely speculation, however, Pope and Talbot will have their existing bridge financing end this coming Monday. Whether banks will be willing to continue bridge financing is up in the air. As is the fate of some 500 jobs at the mill.

Employees have been on a roller coaster rides these past months not knowing with any certainty what the fate of their jobs will be.

Editors Comment: I would seriously suggest that the City of Nanaimo look into the possibility of the city partnering with employees at the mill and trying to put together a company to buy and continue operating the mill. Of course this would be contingent on the outcome of a thorough investigation of the financial viability of the company.
If it were looking viable, the City could well benefit from ownership and operation of the mill.


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