Montreal, Quebec, Canada, 24 August 2010 -- /PRNewswire/ -- 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 CAD 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," he said.
"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," Paterson said.
The settlement agreement is conditional upon AbitibiBowater obtaining the approval of its terms by the Superior Court of Quebec in the Companies' Creditors Arrangement Act (CCAA) proceedings and by the U.S. court in the Chapter 11 bankruptcy proceedings, as well as court approvals in the United States 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 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.