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Premier Darrell Dexter announced today, Dec. 10, that the province has negotiated an agreement with Resolute Forest Products and the Washington Post Company to purchase all Bowater Mersey shares for $1.
"Gaining control of these lands and resources allows the province to put them into the hands of those in our forestry industry who will value them most and can best generate more jobs and wealth in the province," said Premier Dexter. "The province negotiated hard to reach a deal that gives people living in Queens, Lunenburg and all of southwest Nova Scotia renewed hope for their families, and indeed all Nova Scotia reason for optimism about a strong future for forestry."
The province gains all of the company's assets, excluding the Oakhill Sawmill. The province takes compliance with the softwood lumber agreement seriously, and excluded the purchase of the Oakhill Sawmill on this basis. These key pieces of economic infrastructure will bring significant and lasting benefits to Nova Scotians and will cover the company's liabilities, including a fully funded pension plan.
"Some people have said that they would turn their back on the forest sector and the many thousands of families it has supported for generations," said Premier Dexter. "Through our jobsHere plan, we know that innovation is necessary for a successful forestry future. There has to be innovation and focus to build a forest sector for the next 100 years, and that is what this agreement reflects."
In purchasing the shares of the company, the province now controls:
-- 555,000 acres of commercial and protected woodlands, including the Medway, Rossignol and St. Margaret's Bay districts. An independent evaluation pegs the land's fair market value at $117.7 million or $212 per acre. The land also presents more opportunities for forest-sector growth, including community forests. The province issued an expression of interest earlier today, and is exploring opportunities for a Mi'kmaw forest initiative with the Assembly of Nova Scotia Mi'kmaq Chiefs.
-- The former Bowater mill site in Brooklyn, Queen's Co., including bio-refining machines, valued at $5 million. The site will be transformed into a research, demonstration and development centre of excellence and innovation in cleaner energy, bioenergy and forestry products and technology.
-- Brooklyn Power Corp., a 30-megawatt biomass generating facility. The province will sell Brooklyn Power to Emera for $25 million in order to protect ratepayers from the termination of the current Power Purchase Agreement (PPA), which expires in 2025.
The value of the assets acquired by the province, including the woodlands, Brooklyn Power, the mill site and fibre inventory, cash and tax credits total $150.4 million. Total liabilities are $136.4 million, including $118.4 million of the company's assets funding the pension liability and severance, and the extinguishing of a portion of the company's debt at $18 million.
Weighing assets against liabilities, the net gain to the province is $14 million. This is on top of the benefits to the thousands of Nova Scotians who depend on the forestry industry to support their families, including harvesters, silviculturists, millworkers, people working in wood product companies, truckers, and others.
"Forestry has a bright future in Nova Scotia," said Premier Dexter. "By taking control of this resource, we gain the opportunity to build an industry focused on the future. The industry is turning a corner, and I will do everything within my power to make forestry as important a part of our future as it has been in our past."
Bowater Purchase –Supporting Documents and Information