No done deal yet for ESOP
Published 12:00 am Thursday, August 14, 2003
NATCHEZ &045; Slowly and deliberately, word by carefully chosen word, former IP executive and ESOP consultant Bob Taylor made his point.
&uot;If there’s one thing I want to get across to people,&uot; Taylor said, &uot;it’s that it’s by no means a done deal.&uot;
The &uot;it&uot; to which Taylor was referring Wednesday is an attempt by former employees of International Paper’s Natchez mill to purchase the facility, which closed last week, through an employee stock option plan.
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On Wednesday morning at the convention center, about 275 of the mill’s laid-off workers attended a meeting in which Taylor spelled out where that process stands &045; and what would be needed to make a buyout a reality.
&uot;We wanted to clear up any uncertainty&uot; ex-IP employees had about the status of the deal, said Taylor, who worked at the Natchez mill in the 1980s and ’90s, working his way up to mill manager, until recently retiring from the company.
&uot;We’re not here to make an announcement today, but these people deserve to know what we know,&uot; he said.
Employees leaving the 90-minute meeting, almost to the person, described their attitude about the possible deal as &uot;cautiously optimistic.&uot;
&uot;But I think it’s feasible,&uot; said Tony Joe Braley, who worked for more than 30 years at the Natchez mill.
Bruce Harveston was one of many longtime mill employees who came up to Taylor after the meeting to give him a firm handshake, discuss old times and get some answers.
For some time, the mindset surrounding the mill’s closing and Natchez’s future &uot;has been real negative,&uot; Harveston said. &uot;But with him (Taylor) in charge, it’s not going to be that way any more.&uot;
&uot;When he (Taylor) starts something, he sees it through,&uot; said Bill Hancock, a former union leader at the IP mill.
Natchez Fiber Inc., the company formed to back the ESOP, must first get a letter of intent from International Paper to negotiate a buyout of the mill.
According to former mill employees who attended Wednesday’s meeting, Taylor said he hopes to have a letter of intent in hand by Aug. 15.
Meanwhile, those working to put together an ESOP deal must still fine-tune a business plan &045; including what specific products the mill would produce.
Representatives of Natchez Fiber have already shown a draft of the business plan to IP officials and the offices of Gov. Ronnie Musgrove and U.S. Rep. Chip Pickering.
Even if IP decides to sell the mill to Natchez Fiber, that’s not the end of the road, Taylor said. From there, they would have to &uot;sell&uot; their business plan to lenders to raise the tens of millions of dollars necessary to finance the deal.
&uot;Having the asset (the mill and equipment) would help us because we’d have a lot more leverage&uot; in seeking financing, Taylor said.
Some ESOPs are funded by the rollover of employees’ 401-K plans but, in this case, employees’ contribution would probably be in the form of wage concessions, Hancock said.
If the deal does go through, probably 340 people would be hired to work at the mill which, at least initially, would only operate one of the facility’s two production lines, Taylor said.
Without giving a specific date, he said a startup of the second line might be possible in the future.
Before IP announced in January that it would close the mill due to a poor market for chemical cellulose, the mill employed about 640 people.
If the Natchez Fiber deal goes through, production would probably begin in April at the earliest, although employees could begin training at the facility weeks earlier.
&uot;We would be eligible for some things that were not available to IP, like training grants for the last 10 years of our operation,&uot; Taylor said.
Although another mass meeting may or may not be held, employees will be notified in some way as soon as an agreement is reached with IP, Taylor said.
&uot;This is by no means guaranteed,&uot; Taylor said, &uot;but, at the same time, I don’t want to kill hope.&uot;