After nearly a year in bankruptcy court, Fraser Papers Inc. has won approval to sell off its specialty paper business. The $400 million enterprise is now in the hands of the newly formed Twin Rivers Paper Co., run by Fraser's former chief operating officer, Jeff Dutton.
"I'm optimistic, but optimistic with a certain amount of caution," he told Mainebiz from his office in South Portland. "Really, we have a lot of work to do."
Courts in the U.S. and Canada in April signed off on Toronto-based Fraser's plan to sell the specialty paper operation, which once represented more than half of its business, to Twin Rivers. The deal gives the company's creditors 49% interest in the new company, while secured creditor Brookfield Asset Management will convert its claim against Fraser into a 51% interest. The New Brunswick government will convert its $35 million secured loan and accrued interest into preferred shares of the company.
The arrangement also calls for Fraser to sell its pulp, energy and paper operations in Madawaska and Edmundston, N.B., and two lumber mills in New Brunswick.
Dutton, president and CEO of Twin Rivers — a name designed to evoke the St. John and Madawaska rivers — says the company is "adequately financed," but will face challenges common to the struggling paper industry. Twin Rivers will focus more on market demands than did Fraser, says Dutton. Key to that strategy will be highlighting its service and core products of publishing, packaging and label papers as superior to similar offerings from commodity paper companies that only dabble in specialty products, he says. "We have an opportunity to have a paper business that could be very successful," Dutton says.