JAY — Verso paper company announced Thursday that it has sold one of its subsidiaries, Verso Androscoggin Power, which has four hydroelectric generation facilities associated with its Androscoggin Mill, to a New Jersey company.
Eagle Creek Renewable Energy bought the facilities on the Androscoggin River for $62 million, according to Verso’s news release.
“The sale will not affect the Androscoggin Mill’s ability to manufacture its high-quality products and will not cause any interruption in serving its customers,” according to the release.
Two of the hydropower facilities are in Jay and there is one each in Livermore and Livermore Falls.
A mill official called Jay Town Manager Shiloh LaFreniere on Thursday morning to inform her of the sale after the release was issued.
“Hopefully, this is a good thing for the mill and good for the community,” she said.
The sale of Verso Androscoggin Power is part of Verso’s effort to raise money to address its previously disclosed cash flow and liquidity concerns. Verso continues to evaluate other potential asset sales in connection with its exploration of various debt-restructuring alternatives, according to the release.
The mill bought electricity from Verso Androscoggin Power before the transaction, and it will continue to do so under Eagle Creek’s ownership. The mill operates its own energy co-generation facilities — consisting of two recovery boilers, a biomass boiler, three steam turbines and three gas turbines — and also buys electricity from Central Maine Power.
Verso announced in November it was looking for ways to restructure its balance sheet and explore opportunities to raise money to meet financial obligations, including the possible sale of its Androscoggin Mill and related hydroelectric facilities.
The company shut down a paper machine and pulp dryer last year and was expected to reduce the workforce by 300 people either through layoffs or early retirement by Dec. 31, 2015. That was expected to leave about 560 workers at the mill.
The town of Livermore values the hydropower facility, the land, buildings and equipment, in that town at $28.19 million. Verso was assessed $355,000 for the tax year 2015-16, Administrative Assistant Carrie Castonguay said.
Livermore Falls values the hydropower facility real estate and personal property in its town at $13.18 million, tax collector Dawn Young said. The town assessed the company a total of $278,127 in taxes for the property in 2015-16.
Unlike Livermore and Livermore Falls, the majority of these holdings in Jay are combined with the overall mill assessment, LaFreniere said.
“Jay’s hydro-only value is approximately $7 million, which was extrapolated from the larger appraisal that the town had completed in 2013,” she said. “However, the land and buildings in Jay are wrapped into the overall assessment of the Verso mill. As part of this sale, each of those will be given separate non-contiguous accounts for land and building.”
Verso has appealed Jay’s valuation assessments of its mill and associated property for the tax years 2013 and 2014. Those cases are waiting to be heard at the state level.
Eagle Creek Renewable Energy is an owner, operator and developer of hydroelectric generation facilities. Eagle Creek owns and operates in excess of 130 megawatts from 47 facilities. Eagle Creek was founded in 2010, is privately owned and is headquartered in Morristown, N.J., according to the release.
dperry@sunmediagroup.net
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