Province cautious about paper mill: minister

Despite several confusing twists and amid accusations of "confidentiality breaches" and "misrepresentations" from a company seeking to revive a paper mill in central Newfoundland, the province's deputy premier says the proposal may not be completely dead.  

In a statement sent to CBC News on Tuesday, Motion Invest, a Toronto–based private equity firm, said "... that it no longer has any interest in the AbitibiBowater newsprint mill at Grand Falls-Windsor."

The investment company, which also bought Lott Feinpappen GmbH & Co. last year, said it was taken by surprise when Newfoundland and Labrador's Natural Resources Minister Kathy Dunderdale said last Thursday that Lott was considering buying the mill.

The company's press release also said it had been in "confidential discussions to undertake a feasibility-viability study into creating a new non-newspaper print mill" but that "due to recent and wholly incorrect reports and statements that it was close to a deal to purchase" Motion Invest had decided to withdraw its interest.

However, Dunderdale refuted the company's statements during a press conference at the house of assembly on Wednesday, saying she never jeopardized the deal.

"How have we breached your confidentiality because certainly in terms of my public pronouncements, I certainly didn't provide any details out of the letter of intent," said Dunderdale.

Despite the public squabble, Dunderdale said Motion Invest may still submit a business proposal, though she isn't overly optimistic.

"As I said, anybody that puts a proposal before us, we will have a look at it. I can't say, 'I'm going to deal with this person, I'm not going to deal with this person.' You know, that's not the way that we do business," said Dunderdale. "All I'm saying is I had a great deal of reservation the whole way through this. I have more reservation now."

While the letter of intent she received was somewhat vague, Dunderdale said Motion Invest sent her a multi–year proposal to reopen the mill, which included employment targets, start up dates and a request for $52 million in government money. She said a feasibility study was never discussed.

"In the letter of intent, there is no mention of a feasibility study," said Dunderdale.

In a separate email to CBC News early Wednesday evening, Motion Invest maintained that it is pulling out of the deal, saying its "position has not changed since it issued its statement withdrawing its interest in the Grand Falls Mill. To be clear we have withdraw all interest in the Grand Falls Mill."

Company's past includes failed attempts

Motion Invest is owned by Bob Roche, a Canadian business man, whose investment company also owns Lott Paper—a paper company now in bankruptcy protection in Germany. Lawyers handling the bankruptcy of Lott Paper in Germany told CBC News that Roche cleaned out his apartment and no one had heard from him.

While he declined media requests for interviews, Roche invited a producer into his Toronto office, which also serves as the North American and Canadian sales headquarters for Lott paper. Roche told CBC News he'd already spoken to the media and returned emails, though no one from the network had received any correspondence from him.

Motion Invest is Roche's latest venture, but it isn't his first.

From his Toronto–based offices, Roche has made million–dollar promises to re-start failing international busineses, including paper companies in Belgium, France and Spain, among others. To date, all of those attempts seem to have failed.

When the union at a defunct paper company in France got wind of his attempts to keep that mill open, union representatives fought against it.

Dunderdale said she was aware of the company's troubled financial past.

"We knew that there were financial issues, but we knew that their investment wasn't coming from Lott Paper," said Dunderdale.