Dan Alexander, Missota president and chief executive officer, will meet with Brainerd officials Thursday to discuss the future of the paper mill.
Alexander, in a phone interview Friday, said the senior lenders to Missota agreed to extend a forbearance agreement on repayment of loans until late June or early July. The forbearance agreement was set to expire Sunday. The extended time will allow Missota to seek more investors, a partner or a buyer for the paper company, he said.
The Brainerd City Council Tuesday adjourned its regular meeting to 5 p.m. Thursday to meet with Alexander.
Council members are hoping to do more on Thursday than just approve the forbearance extension. Council member Mary Koep asked Dan Vogt, Brainerd city administrator, to request from the state of Minnesota all documents it has pertaining to Missota. Council member Bob Olson asked for a copy of a market study recently completed on the paper mill and for information on how one lender to the paper mill, CIT Group, perceived the forbearance.
Vogt noted Bremer Bank and its partners -- Minnesota Power, the Initiative Foundation and the Department of Employment and Economic Development -- would be seeking the proceeds from the sale of 35 acres of Missota-owned land across the Mississippi River to offset part of what the paper mill owed the bank. Alexander, however, noted it was Missota's intention to use the proceeds of the land sale to continue to stay at "warm idle" through the extended forbearance.
Vogt said he hadn't heard anything from the senior lenders about the forbearance extension. Olson suggested Vogt call Bremer Bank to see where the bank is at with the negotiation.
The EDA acted as a conduit for $500,000 in loans between DEED and Missota. Aside from attorney's fees, no city money was invested in Missota.
In October, Missota defaulted on several loans and in November announced an extended shutdown. In December the EDA and other lenders signed the forbearance agreement.
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