A potential management buyout (MBO) is on the cards at the Donside Paper Company, led by former chief operations officer and current chief executive at the mill, Mike Duckett.


"I am not in a position at present to either confirm or deny this rumour," said Duckett.


Industry sources have also confirmed that an MBO has been the source of speculation over recent weeks.


"The mill is performing extremely well, and we have been encouraged by the support we have received from customers," Duckett said.


A spokesman for administrative receiver PricewaterhouseCoopers said that "a preferred party" was still in talks with a view to purchasing the business.


"One of the preferred parties backers still has to conduct due diligence on the business," said the spokesman.


"Once that is completed further consultations will take place," he added.


At least a further two weeks of discussions are then expected to be held between the parties.


The single-site mill in Aberdeen went into receivership in December of last year, with former chief executive Bill Gore stepping down after putting together a refinancing package.


Together, Gore and Duckett led the management buyout of the firm to make it independent from UK Paper in 1997.


The mill has remained in production throughout the turbulent receivership period, with order intake for production remaining high.


The receivers have been concentrating on the more profitable areas of sales, such as continental Europe and the US.


Story by Andy Scott