AbitibiBowater Amends Subsidiaries' Credit Facilities
Montreal, Quebec, Canada, 14 November 2008 -- (Canada NewsWire) -- AbitibiBowater Inc. today announced that its subsidiaries Bowater Canadian Forest Products Inc. (BCFPI) and Bowater Incorporated (Bowater) and the other parties to Bowater's U.S. and Canadian credit facilities, have entered into amendments to those facilities.
- Waive the requirement that Bowater and BCFPI are required to comply immediately with the more restrictive borrowing base requirements by 15 November 2008 and providing instead for phased-in implementation through 31 March 2009 (extending to 29 April 2009 under certain circumstances) and waive compliance with certain financial covenant requirements for the third quarter of 2008;
- Amend certain covenants, including the leverage ratio, for the fourth quarter of 2008;
- Increase the interest rate under each facility by 125 basis points;
- Provide a lien on substantially all Canadian fixed assets and the shares of BCFPI's South Korean subsidiary (which operates BCFPI's Mokpo mill) to Canadian lenders, as security for indebtedness in a principal amount not to exceed 10% of the shareholders' equity of BCFPI as of 30 September 2008;
- Add a provision requiring that 75% of the proceeds of asset sales by Bowater or its subsidiaries, including BCFPI, be used to reduce amounts outstanding under both facilities on a pro rata basis;
- Reduce, pro rata, the aggregate amount of the commitment under both facilities by USD10 million; and
- Require that Bowater and certain of its affiliates (including BCFPI) maintain no more than $70 million of cash on hand on a combined consolidated basis, with any excess to be used to reduce amounts outstanding under the credit facilities.
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 25 pulp and paper facilities and 34 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 is also among the world's largest recyclers of old newspapers and magazines, and has more third-party certified sustainable forest land than any other company in the world. AbitibiBowater's shares trade under the stock symbol ABH on the New York Stock Exchange and the Toronto Stock Exchange.