PORTLAND (AP) — An investment group seeking to buy the Katahdin Paper Co. mills in East Millinocket and Millinocket plans to reopen the Millinocket mill and to operate both mills, but first it must negotiate new labor contracts and lower property taxes, officials said Monday.

Meriturn Partners LLC, which specializes in turning around troubled businesses, plans to visit the Millinocket area later this week for discussions with labor unions and other stakeholders. Neither Meriturn nor Brookfield Associates, the mills’ owner, discussed financial terms of their tentative agreement.

Gov. Paul LePage, who pledged to work with both parties, said he hopes Meriturn can breathe new life into the Millinocket mill and make both mills profitable.

“The East Millinocket mill employs hundreds of workers in Penobscot County and my administration is committed to supporting the sale to keep those jobs intact,” LePage said. “With this deal, the hope is to restart the Millinocket mill, where more jobs can be created.”

At their peak, the mills employed more than 1,000 workers before Great Northern Paper Co.’s owner filed for bankruptcy in 2003. The new owners decided to shutter the Millinocket mill in 2008, leaving only the mill in East Millinocket, which provides about 450 jobs.

Local officials had nearly abandoned hope of restarting the Millinocket mill, which was shut down because it used costly oil for heat. Meriturn hopes to install a biomass boiler to make it more energy efficient, said Mark Scally, chairman of the board of selectmen in East Millinocket.

Eugene Conlogue, town manager in Millinocket, said local residents are excited about the prospect of the Millinocket mill resuming papermaking operations after years of inactivity.

“We’ve been waiting for the company to find a new buyer to reopen this mill and keep the one in East Millinocket operating,” he said. “Hopefully this new company is going to fit that bill.”

The former Great Northern mills were renamed Katahdin Paper Co. after being purchased by Brascan Corp., now Brookfield Assets Management, based in Toronto. The mills are managed by the former Fraser Papers, now known as Twin Rivers Paper Co., which is also a Brookfield Assets subsidiary.

Before it can complete the deal to buy the mills, Meriturn will have to reach labor agreements and negotiate to lower its property taxes for the mills, officials said. Other potential sticking points include environmental liabilities.

Meriturn wants to complete the deal by April 29, which means all parties will have to hustle, Scally said. “We’ll do our best to come to terms to make this deal happen, but we’re under the gun,” he said.

Lee C. Hansen, a partner at Meriturn, didn’t seem overly concerned that any of those obstacles would get in the way of completing the deal and restoring the financial health of the mills.

“I wouldn’t do this if I didn’t believe the company would survive and, with some capital expenditures and product development, return to profitability,” he told the Bangor Daily News.

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