Resolute Forest Products Inc. has just announced that it has entered into a definitive asset purchase agreement with ND Paper LLC, a subsidiary of Nine Dragons Paper (Holdings) Limited ("Nine Dragons"), for the sale of its Fairmont, West Virginia, recycled bleached kraft pulp mill, for $55 million plus certain elements of working capital, payable in cash.
Nine Dragons is primarily engaged in the production and sale of a broad variety of packaging paperboard products, including linerboard, high-performance corrugating medium, coated duplex board, as well as recycled printing and writing paper and specialty paper. In addition to nine paper mills operating in Asia, Nine Dragons, through its wholly-owned subsidiary ND Paper, also operates two U.S.-based facilities in Wisconsin and Maine.
ND Paper has agreed to offer employment to Fairmont mill employees, effective upon closing of the transaction, which is expected within the next two months.
"We are proud of the progress we have made together with the mill employees over the years to improve the Fairmont operation," said Yves Laflamme, president and chief executive officer of Resolute. "We are pleased that the local community and broader region of the state will continue to benefit from the economic and social impact of the mill's operation."
"Proceeds from this asset sale will enable us to further increase liquidity, and continue to improve our balance sheet and financial flexibility," added Laflamme. "Over the coming days, we will communicate with our customers to discuss the transition of supply as we seek to optimize our recycled bleached kraft pulp business at our Menominee, Michigan facility."
BMO Capital Markets is acting as Resolute's financial advisor on the transaction. Davies Ward Phillips & Vineberg LLP and Jackson Kelly PLLC are acting as Resolute's legal counsels.