Montreal, Quebec, Canada, 09 December 2009 -- /PRNewswire/ -- AbitibiBowater Inc. announced today the closing of the series of transactions resulting in the sale of its 60% indirect interest in the 335 MW hydroelectric facility currently owned and operated by Manicouagan Power Company (MPCo) to Hydro-Quebec for gross proceeds of CAD 615 million.
The company will use the proceeds from the sale of its interest in MPCo in the manner specified in the orders of the Superior Court of Quebec related to the sale, including:
- The repayment of all amounts outstanding under the USD 100 million Super Priority Senior Secured Debtor-In-Possession (DIP) credit facility.
- A CAD 200 million partial repayment of amounts due under its senior secured notes.
- An amount of CAD 282 million set aside temporarily with a wholly-owned unlimited liability company subsidiary, which may lend interest free, subject to certain approvals, up to CAD 230 million to the Abitibi-Consolidated subsidiary.
- The repayment of certain transaction costs, indemnities and holdbacks as specified by the orders.
The effect of this series of transactions is to provide the company's Abitibi-Consolidated subsidiary with additional net liquidity of approximately CAD 168 million. The company also has signed a power supply agreement with Hydro-Quebec's distribution division for the supply of electricity to the company's Baie-Comeau, Quebec, paper mill.
"With the sale of MPCo, the company has completed a significant milestone in our overall plan to improve liquidity and financial flexibility. We are pleased to repay the USD 100 million credit facility guaranteed by Investissement Quebec. Furthermore, AbitibiBowater and its employees appreciate the ongoing support and collaboration of the Quebec government," stated David J. Paterson, president and chief executive officer. The additional DIP will support AbitibiBowater's business continuity while we continue to implement our restructuring program."
AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp, and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 28 wood products facilities located in the United States, Canada, the United Kingdom, and South Korea. Marketing its products in more than 90 countries, the company also is 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.