- 5 - 1976, KKO received financing for the first step of the project through a $10 million loan from Aetna Life Insurance Co. (Aetna). The sawmill was built near the end of 1976, and it commenced operations in January 1977. The sawmill generated losses in each of the years from 1977 through 1981; by the end of 1980, KKO had lost approximately $17.224 million. Due to these losses, KKO, around 1980, decided not to build the pulp mill on its own but to search for a partner. As of the end of 1980, KKO's investment in the sawmill project totaled $31.5 million. In 1978, GNN had an adequate cash flow and wanted to undertake a major capital project. After studying several capital projects, GNN decided to build a pulp mill; GNN wanted to enter the pulp business because of projected worldwide shortages of pulp. Due to the enormous cost associated with constructing a pulp mill, GNN desired to obtain a partner for a joint venture to effectuate the construction. In about August or September 1980, GNN learned about KKO's interest in entering into a joint venture to build a pulp mill in Mississippi. In the fall of 1980, KKO began serious discussions with GNN to build jointly a pulp mill on LRFP’s Mississippi property. At that time, the parties believed that construction of the pulp mill would cost approximately $440 million. KKO’s initial objective was a 20-percent equity relationship and long-term pulp supplies that would be 20 percent of the output of the intended mill. At this time, KKO was buying large quantities of pulp inPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011