Aditya Birla buys 95 per cent share of Nackawic mill

The majority owner of AVGroup strengthened its grip on the former St. Anne- Nackawic mill by increasing its stake to 95 per cent.

The Aditya Birla Group of India bought 80 per cent of the 25 per cent equity interest Tembec held in issued and outstanding shares in the capital stock of both AV Nackawic and AV Cell, leaving Tembec with a five per cent interest in each operation.

The acquisition means Aditya Birla will see a shuffle in the board of directors, giving the Nackawic group more dominance and say in the affairs of the business.

Peter Vinall, president and CEO of AV Group, said the company purchased the 20 per cent share for $9 million and bought out a loan made by Tembec for $6.75 million to AV Cell.

Tembec, a leading Canadian integrated forest products company based in Quebec, operates ates 50 market pulp, paper and wood product manufacturing units. It also produces silvichemicals from byproducts of its pulping process and specialty chemicals.

“This transaction makes sense to Tembec, as we have decided to focus our resources on strengthening the company’s balance sheet and to focus our efforts on our core business units,” said James Lopez, president and CEO of Tembec.

AV Nackawic supports 300 direct jobs and is undergoing a $50-million conversion from paper pulp to dissolving pulp.

AV Cell, located in Atholville, provides 275 direct jobs and produces 340 metric tonnes per day of specialty grade dissolving pulp for the textile industry.

New Brunswick Business Journal News from Carleton and Northern York Counties, Published Thursday May 8th, 2008