Displaying items by tag: AbitibiBowater

AbitibiBowater Inc. has announced the pricing of $850 million of 10.25% senior secured notes due 2018 (the "Notes") in a private placement under Rule 144A and Regulation S of the Securities Act of 1933 (the "Notes Offering"). The closing of the issuance of the Notes is expected to occur on or about October 4, 2010 subject to the satisfaction of customary closing conditions.

The Notes will be issued by ABI Escrow Corporation, a wholly owned subsidiary of AbitibiBowater. ABI Escrow Corporation will merge with and into AbitibiBowater in connection with AbitibiBowater's emergence from creditor protection proceedings, which is expected to occur in the fall of 2010, subject to confirmation of U.S. and Canadian plans of reorganization.

Proceeds of the Notes Offering will be placed in escrow until the effectiveness of the plans of reorganization and will be used upon emergence to repay certain existing debt.

Following emergence, the Notes will be senior secured obligations of AbitibiBowater, will be guaranteed by AbitibiBowater's material U.S. wholly owned subsidiaries and will be secured by substantially all the assets of AbitibiBowater.

The Notes have not been and will not be registered under the Securities Act or any state securities laws. Further, the Notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements and, therefore, will be subject to substantial restrictions on transfer. The Offering is being made only to qualified institutional buyers inside the United States and to certain non-U.S. investors located outside the United States.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.

Forward-Looking Statements

Statements in this press release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about AbitibiBowater's exit financing plans, and the closing of the Notes Offering. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "plan," "will," and other terms with similar meaning indicating possible future events or potential impact on the business or other stakeholders of AbitibiBowater and its subsidiaries.

The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, the ability to obtain proposed financing on terms satisfactory to AbitibiBowater or at all, the condition of the U.S. credit markets generally and difficult industry conditions. Additional factors are detailed from time to time in AbitibiBowater's filings with the Securities and Exchange Commission (SEC), including those factors contained in Exhibit 99.3 to AbitibiBowater's Current Report on Form 8-K filed on September 14, 2010. All forward-looking statements in this news release are expressly qualified by information contained in AbitibiBowater's filings with the SEC. AbitibiBowater disclaims any obligation to update or revise any forward-looking information.

SOURCE: ABITIBIBOWATER INC.

Investors: Duane Owens, Vice President, Finance, 864 282-9488; Media and Others: Seth
Kursman, Vice President, Public Affairs, Sustainability & Environment, 514
394-2398, This email address is being protected from spambots. You need JavaScript enabled to view it.

AbitibiBowater's chief executive has defended the company's decision to reward 50 executives with a combined $6 million in bonuses for their work on restructuring the newspaper giant, the Canadian Press reports.

Union leaders at the insolvent Montreal-based paper maker have reportedly been critical of the plan, which is slated to be reviewed by the company's new board even though the current board and the unsecured creditors committee have already given it the green light.

"Reinstated short- and long-term incentive compensation programs and success bonuses are consistent with a competitive marketplace and are necessary to attract and retain our management ranks," president and CEO David Paterson told a House of Commons committee on Sept. 10.

The $6 million is to be distributed among 50 senior managers and executives deemed critical to the profitability and reorganization of the company
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The Standing Committee on Industry, Science and Technology is reviewing AbitibiBowater's decision to permanently close paper mills in Gatineau and Dolbeau-Mistassini, Que. CP reports that the mills employed 570 workers before production first ceased in Dolbeau in June 2009, followed by Gatineau last April.

According to CP, Paterson told the committee that it will not reopen the Gatineau facility. The Dolbeau mill could reopen if a deal is reached with energy company Boralex, which provides power to the mill. However, Paterson noted that no negotiations are currently taking place.

Another Canadian facility, likely in Quebec, would have to close if Dolbeau were reopened, he added.

Paterson said all employees, including management, have made concessions to support the company, which has lost more than 400 management positions through resignations and retirements.

source: pulpandpapercanada

AbitibiBowater is pleased to announce that the Company has received approval for its plan of reorganization from unsecured creditors under the Companies' Creditors Arrangement Act (CCAA) in Canada. The plan of reorganization received overwhelming support from its unsecured creditors both in dollar amount of claims and in number of claim holders who voted on the plan. Having obtained the requisite votes in each class, except with respect to Bowater Canada Finance Corporation (BCFC), a special purpose company subsidiary with no operating assets, AbitibiBowater will seek a sanction order in respect of its CCAA plan other than in respect of BCFC, which is excluded from the CCAA plan. The Company does not believe that the exclusion of BCFC will affect the timing of the Company's sanction hearing by the Canadian Court nor does the Company expect it will materially delay AbitibiBowater's emergence from creditor protection slated for this fall.

Voting tabulations on the plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code are expected on September 20, 2010. The Company will provide further information when the results become available.

"We appreciate the support given by the significant majority of our creditors under the CCAA process for our plan of reorganization," stated David J. Paterson, President and Chief Executive Officer. "We are confident our restructuring efforts have created a stronger foundation for a more sustainable and competitive company. We look forward to completing the restructuring process and emerging from creditor protection this fall."

Details of the voting results including votes on a class-by-class basis will be available at www.abitibibowater.com

The sanction hearing under the CCAA process is scheduled to occur on September 20, 2010 in the Quebec Superior Court and the confirmation hearing under the Chapter 11 process is scheduled to start on September 24, 2010 in the U.S. Bankruptcy Court in Delaware.

AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ.

SOURCE: ABITIBIBOWATER INC. - ENGLISH

Investors: Duane Owens, Vice President, Finance, 864 282-9488; Media and Others: Seth
Kursman, Vice President, Public Affairs, Sustainability & Environment, 514
394-2398, This email address is being protected from spambots. You need JavaScript enabled to view it.

The Government of Canada will pay AbitibiBowater $130 million in compensation for the expropriation of the company's assets in Newfoundland and Labrador, considering that amount fair market value for the newsprint mill, water and timber rights, power plants and hydro infrastructure. As part of the settlement, AbitibiBowater will withdraw its request for NAFTA arbitration on the issue. The payment will be made after AbitibiBowater completes its restructuring.

Premier Danny Williams of Newfoundland says his province, which took possession of the assets in March 2009, will not repay the federal government for the settlement. Williams is unrepentant concerning the hasty expropriation, according to a story by the Canadian Press appearing in the Winnipeg Free Press on Aug. 25. Williams also says he'd do nothing differently - except for the accidental seizure of the mill itself.

In a joint statement, the Department of Foreign Affairs and International Trade Canada said: "The Government of Canada has resolved this dispute for the benefit of Canada's long-term economic interests. In reaching this agreement, the Government of Canada is avoiding potentially long and costly legal proceedings."

"We believe this is an acceptable settlement for our company, stakeholders and creditors, given the set of circumstances faced by the company at this particular time as well as the inherent uncertainty of any judicial process," stated David J. Paterson, president and CEO. "We are now able to move forward and focus on finalizing our restructuring process and plans to emerge from creditor protection in the fall 2010."

AbitibiBowater today announced a formal settlement agreement with the Government of Canada with regards to its assets and rights in Newfoundland and Labrador, Canada, expropriated by the provincial government under Bill 75 in December 2008. The Government of Canada will pay AbitibiBowater C$130 million, representing not more than the fair market value of those rights and assets, following the Company's emergence from creditor protection.

As part of the settlement agreement AbitibiBowater will waive its legal actions and claims against the Government of Canada under the North American Free Trade Agreement (NAFTA).

"We believe this is an acceptable settlement for our Company, stakeholders and creditors, given the set of circumstances faced by the Company at this particular time as well as the inherent uncertainty of any judicial process," stated David J. Paterson, President and Chief Executive Officer. "We are now able to move forward and focus on finalizing our restructuring process and plans to emerge from creditor protection in the fall 2010."

"AbitibiBowater would like to thank the Government of Canada for its efforts to reach this settlement and avoid a protracted and expensive NAFTA case. We look forward to continuing our strong working relationships with Canada and contributing to the country's economic, social and sustainable development," concluded Paterson.

The settlement agreement is conditional upon AbitibiBowater obtaining the approval of its terms by the Superior Court of Quebec in the CCAA proceedings and by the U.S. court in the chapter 11 bankruptcy proceedings as well as court approvals in the U.S. and Canada of AbitibiBowater's restructuring plans. Following emergence, the settlement payment will be paid to the new Canadian entity.

AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, the Company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets and on the OTC Bulletin Board under the stock symbol ABWTQ.

Abitibi Consolidated Company of Canada, as the owner and operator of a paper mill in Fort Frances, Ontario, was fined $125,000 for a violation of the Occupational Health and Safety Act that caused injuries to two workers and a student. Because the company is under creditor protection, the fine has been stayed.

The incident in question took place on August 20, 2008. Two electricians at the paper mill were changing the power box for part of a paper machine. The power to the box was locked out. The power to the cabinet containing the box was not shut off or locked out. As the electricians removed the power box, they noticed a cable inside the cabinet that needed to be moved. One of them reached into the cabinet with a tool to remove a clamp holding the cable in place. The tool made electrical contact with a live conductor inside the cabinet and this created an arc flash. This caused another arc flash from the live conductors overhead.

The two electricians suffered first, second and third degree burns. A student who was watching them suffered first degree burns.

Abitibi Consolidated Company of Canada pleaded guilty to failing to ensure that a tool was not used near a live electrical installation to prevent electrical contact with a live conductor.

The fine was imposed by Justice of the Peace Patricia Clydesdale-Cornell. In addition to the fine, the court imposed a 25-per-cent victim fine surcharge, as required by the Provincial Offences Act.

AbitibiBowater could emerge from bankruptcy protection in October if creditors vote in August to approve the newsprint producer's restructuring plan, the Canadian Press reports. The Montreal-based company has been under court protection in Canada and the United States since April 2009.

Following the creditor's meeting in late August, the Quebec Superior Court and the U.S. Bankruptcy Court would meet in early September to endorse the restructuring plan. According to a Canadian Press article which appeared in the Winnipeg Free Press on July 5, the proposed timetable is expected to be approved on July 9.

The restructuring plan will see AbitibiBowater's debt decrease from US$6.5 billion to US$1.6 billion as it pays off secured creditors and debtor-in-possession financing. It will also offer up US$500 million in new convertible notes to eligible unsecured creditors.

Unsecured creditors will receive between nothing and 48% when their debt is converted to equity, depending on their class.

The Winnipeg Free Press reports that current shareholders will walk away empty-handed. Others fall somewhere in between, including workers who received no severance when their mills were shut over the past year.

The company has obtained the support of its main bondholders and the unsecured creditors committee in the U.S. The committee's endorsement is particularly significant because it's very rare for a U.S. bankruptcy judge to go against a plan approved by such a committee, the story notes.

Chief executive David Paterson has said the company can't continue to cut its way to offset the continued decline in demand for newsprint.

The reorganized company hopes to capitalize on export market opportunities and promising growth markets for paper used in catalogues, magazine inserts, direct mail, inkjet paper and paper packaging.

AbitibiBowater has streamlined its asset portfolio by closing or idling 3.4 million tonnes of paper capacity since 2007. Newsprint production capacity has been trimmed 36 per cent to 3.6 million tonnes and accounts for 38 per cent of total sales, down from 45 per cent in 2007, according to the Winnipeg Free Press story.

AbitibiBowater has completed the sale of three idle paper mills located in eastern Canada to a wholly owned affiliate of American Iron & Metal Company Inc. for $8.7 million and the sale of a paper mill and other assets located in British Columbia to an affiliate of Conifex Inc. for $33.9 million.

The three paper mills sold to American Iron & Metal, together with certain related assets and the property on which these paper mills are located, are located in Beaupré, Que., Donnacona, Que., and Dalhousie, N.B. As part of the sale, AIM has also agreed to acquire a fourth idle paper mill (Fort William), located in Thunder Bay, Ont. In addition, AbitibiBowater will be paid 40% of the net proceeds from any subsequent sale of paper machines from these mills.

The assets sold to Conifex, all located in Mackenzie, B.C., include a paper mill, two sawmills, including planer mills, as well as timberland operations with a forestry license providing an annual allowable cut of approximately 932,500 cubic meters.

AbitibiBowater has streamlined its asset portfolio to focus on top-performing facilities by closing or idling 3.4 million tonnes of paper capacity, moving from an overall production capacity of 10.4 million tonnes to 7 million tons since 2007. During this period, the company has also sold aggregate assets and land for total proceeds of over $980 million.

AbitibiBowater is currently under creditor protection in Canada and the U.S.

Newsprint producer AbitibiBowater is asking the bankruptcy court for approval to sell four closed mills and their machinery to Montreal-based American Iron & Metal, according to a Canadian Press news report on April 19.

The scrap metal company would buy to assets for $8.7 million. The deal includes the mills at Beaupre, Que., Donnacona, Que., Thunder Bay, Ont., and Dalhousie, N.B. CP reports that American Iron would also pay AbitibiBowater 40% of the money raised from the sale of the paper machines. Even if they are sold for scrap, American Iron would pay at least $5 million.

The metals company would assume all environmental liabilities associated with the closed mills. The company has said it's open to ideas to reuse the vacant mills, but one condition set by AbitibiBowater is that the locations not be used to produce paper.

American Iron's owner Herbert Black told CP the buildings may be scrapped for their metal value, and some of the paper machines may suffer the same fate.

AbitibiBowater is also looking to sell three closed mills in Quebec. The mills in Roberval, Saint-Fulgence and Lebel-sur-Quevillon have been closed since last year.

North America's largest newsprint producer hopes to exit court protection from creditors in Canada and the United States by autumn.

Newfoundland and Labrador's environmental claims against insolvent AbitibiBowater Inc. have been stayed by a Quebec judge, removing a likely hurdle to the company's restructuring process.

The claims, which would have required AbitibiBowater to clean up five sites that it owns or once owned, could have cost hundreds of millions of dollars. Newfoundland wanted them treated like claims from other creditors under the Company Creditors Arrangement Act and therefore eligible for available money.

In dismissing Newfoundland and Labrador's motion, Quebec Superior Court Justice Clement Gascon urged both sides to find "an appropriate forum" in which to settle their differences. The company has been under creditor protection since last April.

source: canada.com Canwest News Service
Judge dismisses Newfoundland's claims against AbitibiBowater