RUMFORD — A little more than a year ago, NewPage Corp. filed for Chapter 11 bankruptcy protection. On Monday, the Ohio-based firm announced that it had reached an agreement on the bankruptcy plan.
George F. Martin, president and CEO of the seven-mill company, said in a statement that the agreement is a very important step for NewPage.
“And assuming satisfaction of certain conditions, this agreement should allow us to emerge from Chapter 11 in the near term,” he wrote.
Local mill spokesman Tony Lyons said no comment would be coming from the Rumford mill.
Ron Hemingway, president of Local 400, said he was optimistic.
“It’s only agreed to in principle and has not totally been voted on by all creditors,” he said Monday afternoon. “But it’s very good for the (union) membership.”
NewPage filed for Chapter 11 on Sept. 7, 2011.
Hemingway said one of the primary concerns of the union is approval of the labor contract by the bankruptcy court.
“It’s been a lot of stress, and everyone is waiting,” he said.
He expects the contract to be taken up at bankruptcy court later this month.
“We have a few things to do once this is settled,” he said.
Local 400 has about 750 members at the Rumford NewPage mill.
The news release from Martin also announced that the company may soon sign an exit financing facility in the form of a $500 million secured term debt and a $400 million asset-based revolving credit.
A summary of the agreement, in principle, can be found at www.kcclic.net/NewPage.
NewPage, created by Cerberus Capital Management, purchased Mead-Westvaco several years ago. Hemingway said he believes the company is now owned by a couple of large banks while it goes through Chapter 11 bankruptcy.
Paper production has continued pretty much as usual since the bankruptcy was filed, Hemingway said.
NewPage Corp., based in Miamisburg, Ohio, owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and, until a few months ago, a mill in Nova Scotia. Recent news reports have said that the Nova Scotia mill, which was closed by NewPage, is about ready to reopen under a new owner.
The paper company had $3.5 billion in net sales for the year ending Dec. 31, 2011, according to the news release.