Devastated paper mill in Sartell is being sold

  • Article by: ADAM BELZ , Star Tribune
  • Updated: January 29, 2013 - 8:04 PM

New owner AIM Development has not disclosed its plans.

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The plant has been closed since a May 28 explosion and fire killed a man and caused $50 million in damage.

Photo: Glen Stubbe, Star Tribune

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A Sartell paper mill that has been closed since a May explosion has been sold, though it wasn't clear Tuesday what the buyers plan to do with it.

Verso Paper, the struggling company that owned the mill, said it is selling the property to a company called AIM Development (USA), which filed for incorporation with the Minnesota Secretary of State's Office on Monday. Information about the firm is scarce.

"I really know very, very little," said Patti Gartland, city administrator in Sartell, which is just north of St. Cloud.

Gartland said Dennis Castonguay, who has been managing the site for Verso, told her he could not give city officials contact information for the buyers or any clue as to their intentions, though he would pass on the request for information.

The mill has been shut down since May 28, when an explosion and fire killed a man and caused an estimated $50 million in damage. Verso said in August that the cost of repairs was prohibitive, especially considering sinking national demand for the coated magazine paper the mill made.

Verso, a company created by private equity investors in 2006, has never turned an annual profit without the help of government subsidies. The company posted a $71 million loss in its most recent quarter, and its stock was trading Tuesday at $1.05 per share.

The company issued a two-paragraph statement Tuesday saying that it has entered an agreement to sell "substantially all of the assets" of the mill to AIM Development and that "Verso does not intend to issue a news release or make any other public statement regarding the transaction except as may be required by law."

Verso shut down two of its three paper machines at the end of 2011 and laid off 175 workers. After the explosion, the mill's remaining 259 workers lost their jobs. The mill was the farthest south of the handful of big paper mills left in Minnesota.

AIM Development named its registered agent as CT Corporation System, a national legal services firm with an office in Minneapolis. The Star Tribune could not reach anyone at CT on Tuesday.

Meanwhile, people in Sartell are anxious to find out what the mill's new owners have in mind.

"Obviously, we'd like to see something come back in and start an industry there, but we don't know that yet," said Steve Hennes, a Sartell City Council member.

Adam Belz • 612-673-4405 Twitter: @adambelz

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