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Resolute to sell South Carolina pulp and paper mill

Resolute Forest Products has agreed to sell its Catawba, S.C., paper and pulp mill to New-Indy Containerboard, LLC for a total purchase price of about US$300 million.

The deal consists of $260 million in cash, subject to customary closing adjustments, and the assumption of approximately $40 million of balance sheet liabilities, largely net pension benefit obligations.

Catawba’s operation includes a kraft mill and a pulp dryer to produce market pulp, a thermomechanical pulp mill and a lightweight coated paper machine. The facility currently employs 460 people.

“This transaction will allow us to realize significant value for an asset whose greatest earnings potential lies with the investment in and diversification of the mill’s operations, as proposed by New-Indy,” Yves Laflamme, President and CEO of Resolute, says. “We are pleased that the mill will continue to operate and benefit the local community, both economically and socially.”

Under the terms of the asset purchase agreement, New-Indy will offer employment to Catawba employees effective upon closing of the transaction, which is expected at or around year-end. The sale is subject to certain closing conditions.