Montreal, Quebec, Canada, 22 February 2011 -- AbitibiBowater has agreed to sell its 75% indirect interest in ACH Limited Partnership for cash proceeds of CAD 300 million to a Canadian consortium.
Following the completion of the transaction, ACH LP will continue to supply electricity to AbiBow Canada Inc.'s Fort Frances and Iroquois Falls pulp and paper mills under the terms of a long-term power purchase agreement.
"We are looking forward to the completion of this transaction. Our intention is to immediately apply CAD 100 million of the proceeds from this sale to reduce company debt,'' said Richard Garneau, president and CEO of AbitibiBowater. "We intend to protect the cost structure of the Iroquois Falls and Fort Frances mills and remain committed to reducing costs.''
ACH LP was established in April 2007 to hold hydroelectric generating assets in Ontario by the company's Abitibi-Consolidated Company of Canada subsidiary (now AbiBow Canada Inc.). As part of the transaction, the Caisse de dépôt et placement du Québec has agreed to sell its 25% interest in ACH LP.
The agreement values the hydro assets, which have a combined capacity of approximately 131 MW, at approximately CAD 640 million.