36 



Mr. Miller. And the boilers and so forth. But in accordance — 

 you made those decisions in '93, '92/'93, engineered them and start- 

 ed to make miniatures in '94/'95, I guess. What is the change here? 



Mr. Lewis. The managing, I guess, of our long-term contract and 

 the unilateral clauses that were changed and the, you know, prom- 

 ises that we thought that were made to be able to have a wood sup- 

 ply in front of us to be able to manage the timber base and to be 

 able to go forward. That has not worked. And with that not work- 

 ing, has just made it more and more difficult to operate. And that 

 is why we are in here. Number one, to secure the completion of all 

 that money to go forward and also get a correction to the contract 

 clauses. 



Mr. Miller. But that — this $200 million would be financed how? 



Mr. Lewis. How will it be financed? Well, basically it will be fi- 

 nanced through banks through LP, who will have to go out and 

 borrow the money. We still have to stand alone as an operation and 

 be profitable or there will be no financing. You know, it is like any 

 segment of a business, you have got to be able to stand on your 

 own and pay your way or there is no financing. 



Mr. Miller. Have you asked the State of Alaska for help? 



Mr. Lewis. Yes, we have, and we have been working with the 

 State through ADA and what we really got down to was the 

 amount of money that we were needing. I think jointly we recog- 

 nized that we needed an extension to that contract to be able to 

 borrow those funds from the State. 



Mr. Miller. So you will borrow what part of the 



Mr. Lewis. There was about 50 million. About 50 million from 

 the State, I think, was identified that the State could loan to us. 



Mr. Miller. Have you gone to the legislature to get it to 



Mr. Lewis. Oh, yeah, we have done that. 



Mr. Miller. What happened? 



Mr. Lewis. Well, number one, the period of time in which to pay 

 it back and with the other expenditures, we needed more than the 

 eight years. ADA was extremely uncomfortable with that eight 

 years. It didn't look like we had the ability of being able to pay that 

 money back. 



Mr. Miller. Have you gone to Ketchikan? 



Mr. Lewis. I am sorry? 



Mr. Miller. Have you gone to the city for help in this financing 

 or other packages? 



Mr. Lewis. We haven't gone to the city at this time or anyone 

 else. Again, you have to have the ability to be able to pay it back. 

 I mean, they are not going to loan you money if you don't have the 

 ability to pay it back. 



Mr. Miller. Well, here is — I guess I am maybe not following this 

 correctly, though, but apparently at some point, I haven't seen the 

 date of it, at some point you penciled these transactions out over 

 the remainder of this contract and said this doesn't work? 



Mr. Lewis. Correct. 



Mr. Miller. And I am just trying to figure out how we appor- 

 tioned a lease. I mean, I want to know, kind of, what the State of 

 Alaska is prepared to do, what would they be prepared to do be- 

 yond what they are currently authorized to do. Ketchikan just got 

 $25 million of Federal money . If this is an important resource, 



