Company still interested in mill: minister

Steve
Steve Bartlett
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An investment group could still submit a proposal to operate the Grand Falls-Windsor mill, Natural Resources Minister Kathy Dunderdale said Wednesday.

However, the potential buyer - Motion Invest - is denying that, maintaining it's no longer interested.

"To be clear Motion Invest's position has not changed ... and we have not communicated any message to any person in government which indicated otherwise," a spokesman wrote in an e-mail late Wednesday afternoon.

Former AbitibiBowater mill in Grand Falls-Windsor

An investment group could still submit a proposal to operate the Grand Falls-Windsor mill, Natural Resources Minister Kathy Dunderdale said Wednesday.

However, the potential buyer - Motion Invest - is denying that, maintaining it's no longer interested.

"To be clear Motion Invest's position has not changed ... and we have not communicated any message to any person in government which indicated otherwise," a spokesman wrote in an e-mail late Wednesday afternoon.

It was the latest in a story causing more head-scratching than the recently wrapped TV show "Lost."

Under questioning in the House of Assembly last week, Dunderdale said Lott Paper - which is backed by Motion Invest - had expressed interest in the paper mill, which closed in March 2009.

Reports soon surfaced Lott was in bankruptcy protection.

On Tuesday evening, Motion Invest posted a release on its website saying it was no longer interested. The decision, it said, resulted from "wholly inaccurate reports and statements" about its intent.

"At no time was Motion Invest ever close to preparing any offer for the Grand Falls-Windsor (mill)," the release read.

The company said talks with the province were supposed to be private, and it regrets "the serious breach in the confidentiality and the misrepresentation of its interest."

That interest, it stated, hinged on the completion of a feasibility study into moving production away from newsprint.

Dunderdale called the Motion Invest's statement "misleading" in a release Wednesday morning.

She said Lott expressed an interest and a letter of intent from Motion Invest followed, "along with details of how they would like to proceed with reactivating the mill."

The information provided, the minister said, included "timelines for operations, estimates of employees to be hired, along with a request of financial help from the provincial government totalling $52 million."

Government, she said, worked in good faith and asked for financial information as well as a business plan.

As the deal appeared dead, Dunderdale told reporters a few hours later there had been calls that day between a department official and Bob Roche of Motion Invest's North America office.

"At this point, they're still expressing an interest in going forward," she said. "They are saying that later on the down the road, they'd like to come forward with a business plan."

A few hours later, the company's press office maintained, "Motion Invest is no longer interested in the Grand Falls mill."

Reporters asked Dunderdale about the claim that confidentiality had been breached.

"How have we breached their confidentiality?" she asked. "Because certainly in terms of my public pronouncements, I certainly (didn't) provide any details out of the letter of intent, other than to say that we had received one, that Lott Paper was involved, Motion Invest is certainly involved, and that they'd be looking for an investment from the people of the province."

The minister said she was aware Lott had financial issues, but she also knew the investment was coming from elsewhere.

Asked if this is the kind of company government wants to do business with, her response was "not reassuring, not at all."

Dunderdale said government will still look at any proposal submitted.

"I can't say I'm going to deal with this person and I'm not going to deal with this person. That's not the way that we do business. All I'm saying is, I had a great deal of reservation the whole way through this. I have more reservation (now)."

Liberal Leader Yvonne Jones said Dunderdale's meeting with reporters was "a sad attempt on her part, and the government's part, to try and save face."

The province has created a "fiasco," she said.

"You've got to remember that she blurted out the interests of this German company in the House of Assembly right in the middle of a polling period and no doubt was designed to position the government and stage them in a way that looked as if they were dealing with real industry and real issues in the Grand Falls area. And we're finding out today that that is not the case."

Jones said people have to be skeptical about a company telling government it is interested in the mill because the paper market is so bad, and when a company asks for $52 million, it should have raised the province's guard.

Grand Falls-Windsor Mayor Al Hawkins expressed disappointment government didn't get a chance to see if something could have been worked out. It would have been a bonus if anything panned out, he said.

"You live in hope. We're going through this transition period where we're looking at diversifying our economy. We're looking at other opportunities, and we are improving and things are doing quite well. Anything that would deal with utilization of our fibre and hydro resources, that would be a big bonus."

sbartlett@thetelegram.com

Geographic location: Grand Falls, North America

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Recent comments

  • WTF,
    July 20, 2010 - 13:02

    The losers here are Dunderdale and her Master, who are responsible for the expropriation of the mill in the first place, and now this ridiculous PR failure which was intended to distract from the biggest mess in the province's history since Churchill Falls. And people thought Peckford's Sprung fiasco was bad???!!!

  • Newfie
    July 20, 2010 - 13:02

    If I were buying a business or asking a bank for a loan to open a business, I would never get the loan if I asked them to GIVE me money free of charge ($27 Million) up front to open the doors.

    Why did the Williams Government (because you know Dunderdale is not allowed to do anything without Danny's blessing) even keep negotiating with Lott or Motion Investment knowing that they were asking for $27 Million to open the doors and they did not expect to have to pay it back?

    This was nothing to do with Kathy Dunderdale, this was a Danny Williams screw up and he is trying to make Dunderdale the scapegoat.

  • Bob
    July 20, 2010 - 13:02

    Blunderdale resign? No way! The money's too good. Ask Rideout, Alyward & company.

  • Greg
    July 20, 2010 - 13:02

    History repeats itself... Look up Smallwood and Valdminis - it is eerily similar.

  • Mark
    July 20, 2010 - 13:02

    There is obvious misunderstanding or shameful spin doctoring going on between Minister Dunderdale or Motion Invest.

    The letter from Motion Invest reads like there is no further interest in the mill and then cites breaches of confidentiality.

    Minister Dunderdale, leave this alone. You are embarrassing yourself again. The province is better off without them.

  • member of the 20%
    July 20, 2010 - 13:02

    Premier Williams, would you please demand Minister Dunderdale's immediate resignation in an effort to bring some level of professionalism and credibility back to your administration and this province. The taxpayers deserve better than this constant charade of one blunder after another.

  • Frank M
    July 20, 2010 - 13:02

    The entire situation is just embarrassing and makes us look like a banana republic. There's always someone around to try and exploit the natives.

  • WTF
    July 20, 2010 - 13:02

    As I recall the province told people not to get their hopes up about this. How many times do we have to put up with outsiders coming in, pretending to save the day if only we throw tens of millions of dollars at them. Jones attempt to twist this into some kind of fiasco is proof that she thinks the citizens of the province are morons. This province is doomed with these losers in the house.

  • Kathy
    July 20, 2010 - 13:02

    Dunderdale, resign. Please. You are an embarrassment.

  • Johnny
    July 20, 2010 - 13:02

    Where's John Smith this morning??!! I am concerned.