By Linda Kor
Catalyst’s Snowflake Paper Mill has been sold and officials of the Town of Snowflake are pleased with the outcome. It was announced last week that Hackman Capital and its affiliates have purchased the assets of the closed Snowflake facility and the shares of Apache Railway for $13,460,000 and other non-monetary consideration. The buyer intends to continue to operate the Apache Railway as a going concern, and the transaction is supported by the Town of Snowflake and various local interests.
The winning bid was made at the auction held Dec. 17 under U.S. Court-approved sale and investor solicitation procedures. The sale is expected to complete in the first quarter of 2013. In addition, the sale ensures that any environmental damages discovered at the site will be cleaned up as required under state and federal law and the permits issued by the Arizona Department of Environmental Quality (ADEQ).
Town Manager Paul Watson said that the town is very pleased with the outcome of the sale. “This has been a very stressful process. I would really like to thank the mayor and the town council of Snowflake for their fore-sight in this matter and taking the steps necessary in this ordeal. This was in no way an easy task and there were concerns about becoming involved in private enterprise. They have had to take some criticisms for what they did, and I really appreciate them taking the heat on this,” stated Watson.
He explained that Hackman Capital was the bidder the town supported because officials of the firm were the most willing to listen to the concerns of the community. “We were in discussions with them either directly or indirectly all the way up to the auction,” said Watson, adding that the auction, held in New York City, took 12 to 13 hours to complete.
The attorney representing the Town of Snowflake was present at the auction and entered a statement in the record that the town would rescind its motion to request that the railway be pulled from the bankruptcy proceedings and would not seek to block the sale of Catalyst’s holdings if Hackman Capital was the winning bidder.
“We are pleased that this transaction has progressed efficiently and that the community’s interests have been considered through the process and in the successful bid,” said Catalyst President and Chief Executive Officer Kevin J. Clarke. “While paper manufacturing is part of Snowflake’s past, this transaction puts the asset on a path to a new future that can continue to bring value to the region.”
Watson explained that Hackman Capital is working with a railway operator to negotiate the next steps on the railway. The buildings and equipment used as part of the paper mill operation will be scrapped, but Watson has heard that there is discussion of other industry having interest in the site due to the existing infrastructure.
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By Linda Kor