Resolute Announces Sale of Fairmont Recycled Pulp Mill

SEATTLE (Scrap Monster): Resolute Forest Products, Inc. (RFP)  has entered into a definitive agreement with ND Paper LLC, a subsidiary of Chinese Nine Dragons Paper (Holdings) Limited towards sale of its recycled pulp mill in Fairmont, West Virginia. The transaction is expected to close within the next two months, subject to customary closing conditions and necessary approvals.

The sale deal of the recycled bleached kraft pulp mill is for a sum of $55 million, plus certain elements of working capital under consideration. Nine Dragons intends to fund the transaction through existing cash on its balance sheet.

The acquisition, followed by increased capital investment by Nine Dragons will result in significant expansion of mill capabilities. It must be noted that the mill has an annual production capacity of approximately 218,000 metric tons. The recycled pulp from the mill is used in a wide range of products, from packaging to tissue paper.

By way of this key acquisition, ND Paper will gain access to high quality recycled pulp, thereby diversifying its manufacturing base. The transaction, consistent with the company’s long-term strategy of environmentally sustainable paper making, will help the company to boost its U.S presence. All Fairmont mill employees will be offered employment, upon closing of the acquisition.

Yves Laflamme, president and chief executive officer of Resolute stated that proceeds from the sale will lead to increased liquidity, improved balance sheet and financial flexibility.