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Mill buyer changes on day the deal was to close

Gregory Schain (left), a Vice President at Counsel RB Capital, shakes hands with Willis Blevins, general manager of the Fraser Mill, after a tour of the facilities on Tuesday. Counsel RB Capital is slated to close on the deal to purchase the mill on Dec.8. Matilda Brown. (click for larger version)
December 08, 2010
BERLIN — The deal to purchase the Fraser Mill by M&M Contracting and Consulting which was slated to close Nov.30, has fallen through. Instead, the back-up buyer, Counsel RB Capital LLC, has come forward. That company is based out of Toronto and has a history of buying distressed assets.

According to County Commissioner and Mayor of Berlin, Paul Grenier, representatives have given assurances that they plan to run the mill long term.

When contacted, Willis Blevens of the Fraser Mill said that he wasn't sure what direction the new company was taking, but said "I'm under the impression that they are looking for a partner to reopen the mill, but that is all hearsay."

Glen McMillan, the chief restructuring officer for Fraser, said that Counsel RB Captial — who signed on last week as a back-up buyer for he mill — was set to close the deal on Dec.8 for $2.7 million. Counsel RB has indicated their intentions to run the mill, he said.

Three representatives from Counsel RB arrived at the Gorham Mill around 9:30 a.m. on Wednesday, Dec.1, to tour the facilities.

Gregory Schain, one of the vice presidents of Counsel RB Capital, was there for the tour. He said that in addition to the tour, they had met with mill management and other key players to talk about the purchase. He said that he hopes to meet with representatives of Berlin and Gorham during his next trip, which, if all goes as planned, is to be around the closing date of Dec.8.

Schain said that the facility looks like a very well maintained property and that the company "fully intends on doing this deal." Since Counsel RB is not in the paper business, they have intentions of bringing in an operating partner. The company has had conversations with four groups so far and two of those groups have shown an interest in the property. Schain said that the goal was to market the mill for a potential buyer as soon as they close, but said that before that "we are trying to get our ducks in a row."

Schain confirmed that Capital RB has spoken with someone from Merchant Banc — the original would-be buyer of the mill — and said that they had agreed to meet once the deal was closed. Representatives from Merchant Banc said that they could not speak about any potential deals until after the closing.

Schain also said that his focus right now is more on transactional work — all the documents that need to be reviewed and signed — than on what the company will do after closing.

The company is also looking to possibly get another Phase 1 environmental report as protection against any problems that are currently present.

The talks with the union have been worked out for the most part and the company is still working with the state to secure all necessary items for the purchase.

Martin Lord Osman
Varney Smith
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