It wasn’t too long ago that the bad news spread across the U.P.:
Manistique Papers was going out of business. But it has turned into good news for the southern U.P. community that relies on the paper mill, as local bank mBank and the state’s economic development corporation, MEDC, have partnered to keep it afloat and even help it grow.
The Michigan Strategic Fund this week approved a loan of up to $5 million to Manistique Papers, which will be administrated through the Michigan Business Growth Fund.
The company had announced it would shutter the mill in August after its lender, RBS Citizens, wouldn’t work with it on loan terms that would allow it to continue operating. Manistique Papers was facing liquidation and bankruptcy, including a sell-off of its assets. Then, Manistique-based
mBank, with the cooperation of the MEDC, brokered an agreement to buy the mill’s loans from RBS for $6.8 million. It sold $2.5 million to the MEDC, which set conditions for the mill to hire back 100 employees over the next six months.
"The potential loss of jobs and its economic impact across the Upper Peninsula was enormous and this was all happening despite the fact that the company had never missed a loan payment and investors were willing to guarantee the company's notes," says Michael Finney, president and CEO of MEDC. "We are pleased that so many came together in short order to help get this company back up and running."
The loan now approved for Manistique Papers will give the company restart funding, so that it can purchase inventory to get the mill running again, pay recalled employees, and restart the sales cycle and regain customers and suppliers. The mill--the largest employer in the county--currently employs 45 people, with an additional 90 still to be added.
Writer: Sam Eggleston
Source: Michael Finney, Michigan Economic Development Corporation
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