ABERDEEN, Scotland (From news reports) -- Trade union representatives have welcomed talks with a management team to acquire Arjowiggins Fine Papers' Stoneywood and Chartham mills after negotiations with a preferred bidder broke down earlier this week.
The two mills, along with a sales office in Basingstoke, fell into administration in January following problems at parent company Sequana, which is now in liquidation.
The businesses employ more than 600 staff, of which 489 work at Stoneywood mill near Aberdeen, a plant dating back to 1770. Chartham mill near Canterbury has been producing translucent paper since 1938. There is an office in Basingstoke.
A spokesman for the joint administrator FRP Advisory said: "The joint administrators have begun discussions with a management buyout team after negotiations with a preferred bidder ended without a sale.
"Discussions will now be progressed with the MBO team, Scottish Enterprise and other interested parties over the coming weeks to explore whether a sale can be secured. In the meantime, it remains 'business as usual' and the plant continues to operate."
A Scottish Enterprise spokesman said: "We remain committed to working with the administrator and our partners to find the best possible outcome for this business and its employees, including exploring the option of a management buyout."
Arjowiggins Fine Papers (Stoneywood mill) had sales of £123.6m in its latest accounts, for 2017, but a slim operating profit of £965,000 showed how margins were squeezed. It makes fine papers including Conqueror, which has been made at the site since 1888. Two-thirds of its sales were made through merchant Antalis, in which Sequana has a majority stake.
Unite the union said the MBO option was confirmed at a meeting yesterday with Business Minister Jamie Hepburn, representatives of Scottish Enterprise, council leaders and other government agencies.
Shauna Wright, Unite regional industrial officer, said: "Unite is optimistic that a successful buy-out of the Stoneywood Mill can be achieved in the coming weeks, which would maintain hundreds of jobs on site. The mill has a proud 250 years old history and the news of the buy-out option will be welcomed by the workforce.
"However, there is a lot of hard work ahead to get this offer over the line. Throughout this process, Unite will fully support our members and do all we can to ensure that all their terms and conditions, and ultimately their jobs are protected."