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July 16, 2018

Verso stands to gain $42M in deal OK'd by Department of Commerce

File Photo / Amber Waterman
File Photo / Amber Waterman
Verso Corp., which owns the Androscoggin Mill in Jay, could receive up to $42 million from an agreement with Canadian paper producers, after the Department of Commerce granted its request to refund duties imposed on certain Canadian-produced papers.

Verso Corp. (NYSE: VRS), which operates a 400-employee paper mill in Jay, could receive up to $42 million from an agreement with Canadian paper producers, after the Department of Commerce granted Verso's request to refund duties that were paid on certain Canadian-produced papers.

In 2015, countervailing duty orders were issued on supercalendered paper imports from Canada, according to a news release issued by U.S. Sen. Susan Collins, R-Maine. Verso, the last remaining producer of supercalendered paper in the United States, filed a request in March 2018 asking the Commerce Department to revoke its order imposing these duties. Verso determined that, in retrospect, the duties were not offsetting the impact of Canadian subsidies as intended and subsequently entered into a settlement agreement with Canadian producers of supercalendered paper.

As part of a deal signed in March with Port Hawkesbury Paper Limited Partnership and Irving Paper Limited, the company had asked the Commerce Department to revoke a duty on Canadian supercalendered paper. Verso would receive a percentage of the returned duties, capped at $42 million, according to a filing with the Securities and Exchange Commission.

The request was for the duty to be lifted retroactively to Aug. 3, 2015, according to the Commerce Department. The duty was imposed that year in response to Canada's subsidizing of supercalendered paper production.

Supercalendered paper is the glossy stock often used for magazines and newspaper supplements.

The Commerce Department in a July 5 filing noted that the company "expressed a lack of interest in the enforcement or existence" of the duty.

Collins praised the Commerce Department's decision.

"This announcement is great news for Verso and its Jay mill, a cornerstone of Franklin County's economy, as well as for the hundreds of hardworking employees in Jay," she said in a press release. "I commend the Canadians and Verso for their good faith negotiations, which will help ensure a bright future for Verso and the Jay mill, leading to greater investment and ultimately the creation of more jobs."

Verso has annual net sales of $2.5 billion and operates six mills in addition to the one in Jay.

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