* Closure will result in $114 mln charges
* To realize charges in Q3
* Shutdown to reduce annual capacity by 20 pct
Aug 2 Verso Paper Corp said it will
shutdown its destroyed paper mill in Minnesota, considering the
length of time it would take to rebuild the mill structures and
The closure will result in a pre-tax charge to earnings of
about $114 million, which includes severance and other shutdown
costs, during the third quarter.
"Decision to permanently close the mill will have a
significant impact on many people across this region, especially
our Sartell Mill employees," Verso said in a statement.
The company said the permanent closure of the mill will
reduce its annual coated groundwood capacity by 180,000 tons, or
about 20 percent.
Explosion and fire at its paper mill in Sartell, Minnesota,
on May 28 claimed the life of one employee and injured four
others. About 5,000 tons of finished paper and work-in-process
inventory was destroyed due to the fire.
The decision to permanently shut the mill also comes amid
rising costs of key raw materials, such as recycled fibre and
energy, and lower demand from China.
Verso said last October it would cut 300 jobs and shut down
three paper machines to reduce its annual production capacity by
Shares of the Memphis, Tennessee-based company closed at
$1.45 on Thursday on the New York Stock Exchange.