Newfoundland government signs $110 million loan agreement with mill

CORNER BROOK, N.L. – The government of Newfoundland and Labrador has signed a loan agreement for up to $110 million with Corner Brook Pulp and Paper Ltd.

The province says it has also inked a power assets and water rights purchase agreement with the mill.

The loan is fully repayable with about $85 million to be released up front to allow the mill to refinance existing debt and for working capital, while the remaining $25 million will be made available as planned capital improvements are completed.

The repayment will be spread out over 59 quarterly payments of $1.85 million with the final payment due on Dec. 31, 2033.

Under the agreement the mill is required to continue to operate, is responsible for environmental liabilities and must contribute to the employee pension plans.

The province says in addition to the loan announced today it has invested about $100 million in the mill since 2004.