Slammed by the faltering economy and a drop in demand for its newsprint and other paper products, AbitibiBowater last week filed for bankruptcy protection in both the United States and Canada .
AbitibiBowater said bankruptcy was the only option after U.S. creditors rejected a recapitalization plan designed to reduce debt by more than $2 billion.
“The company has concluded that there are no viable alternatives to its previously announced proposed refinancing of its Bowater and Abitibi-Consolidated subsidiaries, and as a result has determined that the best course of action is to pursue its overall restructuring under court supervision in the United States and Canada,” the firm said in a statement.
According to Bloomberg, AbitibiBowater had assets of $9.9 billion and debt of $8.7 billion as of Sept. 30.
The firm said it has struck an agreement to receive $200 million in debtor-in-possession financing from Fairfax Financial Holdings Ltd. and Avenue Management LLC to support continuing operations and that no other immediate changes to its business are foreseen.
AbitibiBowater was formed in late 2007 when Abitibi Consolidated merged with Bowater Inc. in a transaction valued at $4.8 billion.
Monday, April 20, 2009
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