A California-based venture capital firm outbid the Kalispel Tribe at an auction last week to apparently buy the Ponderay newsprint mill in Usk for $ 18.1 million.
Initial plans are to re-equip the inactive plant to make cardboard used for shipping and mining for cryptocurrency, court documents show.
Bankruptcy trustee John Munding has scheduled a hearing before U.S. bankruptcy judge Frederick Corbit for Thursday at 11 a.m. to discuss the bids, but he filed court records on Wednesday indicating that the winner of the auction was Allrise Capital Inc. Corbit must approve the winning bid.
“They plan to reuse parts of the mill for the production of corrugated waste paper,” said Chris Bell, chief broker of NAI Black, who helped market the mill. California-based Allrise Capital plans to “re-equip the plant, making a significant investment to relight it and bring back jobs.”
Todd Behrend, the acting manager who was hired to manage a team to keep the plant operational as its bankruptcy fate was decided, said plans to reopen the plant presented the best-case scenario after it closed and the layoff of around 150 employees in June. .
“This is what everyone in the community, including me, was hoping to see,” Behrend said, “is to see it productive again and paying taxes again.”
The paper mill, which had been one of Pend Oreilles’ largest employers, was previously jointly owned by Lake Superior Forest Products, a subsidiary of Resolute Forest Products in Quebec, and five major US publishers.
Until the auction process last week, negotiations failed to find a new owner for the 927-acre property, which consists of 29 buildings and storage facilities and is adjacent to the Pend Railroad. Oreille Valley and the Pend Oreille River.
The land and buildings had a combined assessed value of over $ 59 million, according to a recent property tax return from the Pend Oreille County Treasurer’s Office.
The Kalispel Indian tribe had previously expressed interest in purchasing the plant and submitted an offer. But he was rejected in October.
Munding brought in Bell last year to market the site, which went on sale in December for $ 11.5 million. However, the first court-ordered offer that went into buying the site was for $ 7.5 million.
“We put it up for sale and steered the marketing to go into the auction process,” Bell said.
Marketing materials highlighting the plant were sent to tens of thousands of investors.
“We’ve had a great response,” Bell said. “We had people from Europe and South America looking for it and making an offer. Because of the multiple parties… it worked in the interest of the creditors and in the interest of the successful bidder. “
Just as important as the plant’s available horsepower was its production potential for packaging products, Bell said. Part of Allrise Capital’s plans include using the electricity available at the factory to mine Bitcoin.
“There is a lot of power,” said Bell. “With all the excess power, they are looking to convert it into a data center with blockchain infrastructure, or crypto mining.”
A call to Allrise Capital for comment was not immediately returned Wednesday afternoon.
Behrend, the interim plant manager, said some of the interested parties had considered scrapping the plant but using the energy for other purposes.
“A range of different opportunities have been launched,” Behrend said. “The last conversation I had (with Allrise officials) was that they were trying to find a good use of the electrical infrastructure. They wanted to restore value to the community in terms of jobs.
According to court records, the Kalispel Tribe pushed the bidding during the auction before placing their final bid at $ 17.5 million. Allrise Capital’s final offer was $ 18.1 million, for which Munding said in court records he would seek approval from Judge Corbit on Thursday.
Bell noted that the figure of $ 18.1 million will net creditors much more money than the initial asking price of $ 11.5 million.
“Jobs. That’s the most important thing,” Bell said. “John (Munding) was committed to finding a bidder to satisfy both the creditors and the community. So I applaud him for that. .
Thomas Clouse can be reached at (509) 953-0561 or firstname.lastname@example.org