Board Authorizes Possible Sale of Plants
AUGUSTA, Ga. (AP) _ Georgia-Pacific Corp.’s board has given management approval to explore the sale of up to 20 of its mills and box plants to pay down debt from its $3.74 billion acquisition of Great Northern Nekoosa Corp.
Timberland required to support the plants also may be sold, said Georgia- Pacific Chairman T. Marshall Hahn Jr., who said the properties ″may not it our long-term strategy.″
The board approved the measure at a meeting here Tuesday in conjunction with the Atlanta-based forest products company’s annual shareholders meeting. Hahn said no final decisions have been made about which plants will be sold.
Company spokeswoman Sheila Weidman declined to place a value on the plants that may be sold, although the company said last month it would sell at least $1 billion in assets to cut costs, raise capital and reduce debt.
Analysts quoted in today’s editions of The Wall Street Journal said three mills alone that might be sold could fetch as much as $1.2 billion.
Weidman stressed that Georgia-Pacific is not in need of cash to complete the Great Northern deal. ″The financial arrangements for the merger weren’t based on the sale of assets,″ she said.
The company said it was considering selling a linerboard mill at Valdosta, Ga.; a linerboard, corrugating medium and kraft paper mill at Toledo, Ore.; a corrugating medium mill at Tomahawk, Wis.; and box plants in East Point, Ga.; Garland, Texas; Milan, Mich.; Modesto and Los Angeles, Calif.; Newark, Ohio; Newberry, S.C.; Rutherfordton and Salisbury, N.C.; Milwaukee; Minneapolis; Olympia, Wash.; Buffalo, N.Y.; Grafton, W.Va.; Miami; Bristol, Pa.; and Gas City, Ind.
Weidman said the plants were chosen because of a ″geographic or product redundancy″ that resulted from the acquisition of Norwalk, Conn.-based Great Northern.
Meanwhile, Weidman said the acquisition of Great Northern’s outstanding shares should be complete by the end of June. So far, Georgia-Pacific has acquired about 96.5 percent, or 53 million, of the outstanding shares, she said.