by Dennis Dalman
The Verso Paper Corp. in Sartell has received a $40 million insurance settlement relating to damage and costs from the May 28 explosion and fire that killed one worker and ultimately forced the permanent closure of the paper mill.
The news was announced during a conference call with investors.
Verso distributed about $19 million of the settlement funds in severance pay and benefits to workers who lost their jobs permanently after the plant closure was announced. At that time, there were about 250 people working there. More money will be given to former workers in the second insurance-settlement round.
Company officials said they expect a second insurance settlement of about that same amount ($40 million) because of losses incurred by the company in the third quarter of this year – losses totaling at least $100 million.
Shutting down and clean-up on the site will continue at least through next year. In the meantime, company officials are analyzing ideas submitted as to how that site can be sold and adapted for possible future uses.
Despite the tragedy that occurred at the Sartell site, however, company officials expressed confidence about the financial outlook for Verso’s other three paper mills in the nation.
During the conference call, Verso Chief Executive Officer Dave Paterson said Verso is staying in close contact with its Sartell connections.
“We continue to stay in touch with the affected (worker) families,” he said. “It’s been a very difficult thing for us, but I want to compliment everyone up there for working through it with us.”
Robert Mundy, Verso’s vice president and chief financial officer, estimated it will cost anywhere from $30 million to $40 million for the rest of severance costs and shut-down costs.
In giving answers to investors, Paterson noted the company has been doing some product shifting, noting at one point “Newsweek” magazine, which uses the shiny-coated paper Verso produces, decided recently to become an online-only weekly news magazine.
To learn more about the Verso conference call, view the transcript at www.SeekingAlpha.com, the source for the information above.