The state Economic Development Authority has agreed to transfer a low-interest loan to help a Wisconsin company buy a Clarksburg factory.
Skana Aluminum Co. of Manitowoc, Wis., will assume a $2.7 million loan from the authority currently held by Scott Aluminum Corp. of Chagrin Falls, Ohio. Scott currently operates the Clarksburg factory.
David Warner, the authority's executive director, said Skana plans to continue making custom aluminum coils and flat-rolled products at Clarksburg. The factory has 35 employees.
The factory has changed hands several times. Last year, Scott acquired it from Aluminum Services Limited Liability Co. of Morgantown. In 2010 Aluminum Services bought it from Precision Coil.
Precision Coil had closed the factory in 2009 when aluminum prices plunged. The authority originally offered the low-interest loan on the factory's equipment as an incentive to get the plant reopened, Warner said.
Warner was asked why the authority is letting Skana assume the loan instead of negotiating a higher interest rate. He said Skana's goal is to acquire the plant from Scott by the end of the month.
"Had we approved a new loan with new terms it would have had to go through a loan commitment and final-approval process which we could not have accomplished by the end of September," he said.
Skana will pay an interest rate of 1 percent during the first 40 months of the loan and 2 percent during the last 60 months. Warner said that under normal circumstances, the authority would charge an interest rate of about 2.5 percent.
Warner said the authority will actually receive a higher yield than the specified interest rates because Skana will pay a 1 percent assumption fee -- about $27,000 -- up front.
Five businessmen established Skana in 2009, bought a shuttered rolling mill in Manitowoc for $6.8 million, and reopened it.
Also during its regular monthly meeting on Thursday, the authority granted final approval to four low-interest loans totaling $1.3 million that will help Ohio Valley Veneer Inc. of Piketon, Ohio, buy the former Spencer Veneer plant at Spencer.
In other action, the authority agreed to extend previous loan commitments it made to Multifresh Inc. of Beckley, the Mid Atlantic Aerospace Complex at Bridgeport, the Polymer Alliance Zone of Davisville, Kanawha Scales & Systems Inc. of Poca and Yellowstar Materials Inc. of Ivydale.
Warner said all of the projects are in various stages of closing except the Kanawha Scales project. Kanawha Scales asked the authority to keep its loan commitment open for a few more months, he said.
Contact writer George Hohmann at busin...@dailymail.com or 304-348-4836.