The U.S. Bankruptcy Court is planning to hear arguments on AbitibiBowater's reorganization plans on Nov. 5. The reorganization plan already has creditor approval in both the U.S. and Canada, and has been approved by the Quebec Superior Court. One subsidiary, Bowater Canada Finance Corp., failed to get creditor approval and would be excluded from the restructuring.
The Canadian Press reports (in a story in online edition of the Winnipeg Free Press on Oct. 22) that the restructuring plan allows AbitibiBowater to secure up to US$2.3 billion in loans minus cash on hand. It has negotiated an asset-backed revolving loan of up to US$600 million from Citigroup, Barclay's and JP Morgan. It also had a US$850-million debt offering and C$130 million from a NAFTA settlement with the federal government over a lawsuit filed against Newfoundland and Labrador.
AbitibiBowater said it hopes to earn more than US$1.5 billion in net profits over the next four years as it emerges as a lower-cost producer better able to absorb market and currency fluctuations. Revenues are forecast to grow by 14.5 per cent to US$5.34 billion in 2011 from US$4.66 billion in 2010. They would then remain stable through 2014.
According to Canadian Press, AbitibiBowater has cut 6,000 jobs and dramatically reduced its paper and wood capacity by shutting down mills as it prepares to exit creditor protection. As of the end of March, it employed about 11,900 people, mostly in Ontario and Quebec.
Monday, 25 October 2010 09:38
Decision day for AbitibiBowater restructuring approaches
Ian Melin-Jones
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Canadian News
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