Northern Pulp to sell assets after feasibility study completed

CITYnews halifax / By Mark Hodgins

Northern Pulp is beginning the process of selling off company assets, five years after shutting down its mill in Nova Scotia.

The insolvent company announced on Monday night that the court-supervised sale process is starting, after it failed to secure funding for a new pulp mill in the province.

“This decision follows the completion of a comprehensive feasibility study, which concluded that the company could not achieve the 14% Internal Rate of Return (IRR) required in the settlement agreement to develop a modern bioproducts hub in Liverpool, Nova Scotia,” reads a news release from Northern Pulp.

The company said it’s grateful for the support from the province and local stakeholders over the course of that study.

In a statement, natural resources minister Tory Rushton said the province sees the opportunity for a new, sustainable pulp mill in Nova Scotia.

Related:

• N.S. government grants extension as Northern Pulp studies plans for new mill
• N.S. reaches deal with owner of Northern Pulp, firm pursues new mill in Queens County
• Judge approves settlement agreement for Nova Scotia’s Northern Pulp mill

“We did everything we could to help make it a reality,” Rushton said. “And while this is not the outcome we had hoped for, our government remains a steadfast partner with the industry in exploring how we might work together – and with the federal government – in attracting a new partner that sees the potential in doing business here.”

Northern Pulp says money from the sale of its assets will go toward its creditors, pension plans and to fund closure and maintenance costs, with remaining money going to the Nova Scotia government.

Northern Pulp has been under creditor protection since June 2020 after it closed its kraft paper mill in Nova Scotia’s Abercrombie Point.

The shutdown was ordered after Northern Pulp failed to meet the province’s environmental requirements for a new effluent treatment plant.

It once employed about 300 people.