Group signs agreement with suitor for shuttered Hampden waste plant but won’t say who it is
By Charles Eichacker, Bangor Daily News Staff
The backers of a shuttered Hampden trash plant have lined up a potential buyer to restart the facility, but they are not publicly identifying the group that has expressed interest in taking over the $90 million operation.
On Tuesday afternoon, the unidentified buyer reached a tentative agreement — known as a memorandum of understanding — with the group of Maine communities that previously sent their household waste to the facility before its closure last spring.
Under the memorandum of understanding, the buyer will now work to negotiate a final purchase agreement with the small group of people who serve as bondholders for the Hampden plant — and have a majority financial stake in it — and with the Municipal Review Committee, which represents those 115 Maine towns and cities. MRC representatives generally coordinate with a trustee for the bondholders and have not publicly identified who they are.
The MRC’s board of directors unanimously approved the memorandum during a virtual meeting Tuesday afternoon, after spending more than 90 minutes in a closed door executive session.
Once the directors returned into public session, MRC board president Karen Fussell said the memorandum would not become public because it’s “not a binding commitment” and “we really are still in the process of negotiating all the details of this potential arrangement with the multiple parties.”
“We’re still at a delicate point of the process of working towards a final sale,” Fussell said, adding her “regret’ that the entity couldn’t be publicly identified. She said that she anticipates the deal will be closed in the first quarter of 2021.
MRC Executive Director Michael Carroll didn’t immediately respond to a question about whether there was an exemption in Maine’s Freedom of Access Act that prevented the document from becoming public.
The bondholders and MRC originally received queries from seven parties that were interested in buying the plant, which shut down last May after running out of operating funds amid a number of startup challenges. By early fall, three parties were still interested in taking over the plant, and by this month, the MRC and bondholders had narrowed down their choice to one.
If the deal goes through, it would take an estimated six to eight weeks for the new owner to reopen the plant, Carroll said earlier this month.
The $90 million plant is now technically owned by Fiberight, the Maryland-based company that developed its technology, and the private equity firm UltraCapital, which has a roughly $28 million stake in the operation.
They are separate from the bondholders, who originally provided $52 million for the construction of the plant and who — along with the MRC — have been largely overseeing the plant since it closed with more than $4 million in unpaid expenses and obligations, in addition to its bonds.
The plant, known as Coastal Resources of Maine, stopped receiving trash at the end of May after those bondholders declined to loan it an additional $14.7 million, which would have allowed it to pay down those debts and make critical improvements to its performance.
The enterprise ran into a number of development and operating challenges after finally starting commercial operations late in 2019, including construction delays, new import restrictions from China that had made it harder to sell off baled recyclables and separate delays in the ability to sell off other materials that it makes from municipal waste.
The MRC communities initially had to send all of their trash to landfills after the closure of Coastal Resources of Maine, but since July, they have been sending three-quarters of it to the Penobscot Energy Recovery Co. plant in Orrington, where it’s burned to make electricity. For many years, the MRC towns had sent all of their waste to PERC until deciding to switch to the new Hampden competitor beginning in 2018.