Verso Corporation announced that it has sold one of its subsidiaries, Verso Androscoggin Power LLC (VAP), to Eagle Creek Renewable Energy, LLC, for a purchase price of approximately $62 million in cash. VAP owns four hydroelectric generation facilities associated with Verso’s Androscoggin pulp and paper mill located in Jay, Maine. The parties contemporaneously entered into a purchase agreement and consummated the transaction.
The sale of VAP is part of Verso’s efforts to raise funds to address its previously disclosed cash flow and liquidity concerns. Verso continues to evaluate other potential asset sales in connection with its exploration of various debt restructuring alternatives.
The sale of VAP is expected to have no impact on the operations of the Androscoggin mill. The mill purchased electricity from VAP before the transaction, and it will continue to do so with VAP now under Eagle Creek’s ownership. Moreover, the mill operates its own energy cogeneration facilities – consisting of two recovery boilers, a biomass boiler, three steam turbines, and three gas turbines – and also purchases electricity from Central Maine Power Company. Most importantly, the sale will not affect the Androscoggin mill’s ability to manufacture its high-quality products and will not cause any interruption in serving its customers.