ABH (NYSE, TSX)
MONTREAL, Feb. 11 /CNW Telbec/ - AbitibiBowater announced it has signed
a binding agreement for the sale of its 75% indirect interest in ACH
Limited Partnership ("ACH LP") to a consortium formed by a major
Canadian institutional investor and a private Canadian renewable energy
company (the "Consortium"). ACH LP was established in April 2007 to hold hydroelectric generating
assets in Ontario, Canada 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, taking into consideration AbiBow
Canada's drag-along right contained in ACH LP's governing agreements
between the Caisse and AbiBow Canada.
Cash proceeds for AbitibiBowater's 75% indirect interest will be
approximately C$300 million and will be used to reduce the Company's
debt, to enhance liquidity and for general corporate purposes. As part
of the transaction, ACH LP will maintain its outstanding debt with the
Caisse with a face value of C$250 million. The agreement values the
hydro assets, which have a combined capacity of approximately 131 MW,
at approximately C$640 million.
"We are looking forward to the completion of this transaction. Our
intention is to immediately apply $100 million of the proceeds from
this sale to reduce Company debt,'' stated Richard Garneau, President
and Chief Executive Officer of AbitibiBowater. "We intend to protect
the cost structure of the Iroquois Falls and Fort Frances mills and
remain committed to reducing costs.''
The closing of the transaction is subject to certain terms and
conditions, including, but not limited to, obtaining required consents
and approvals and other customary conditions. Closing is expected to
occur within the next 60 days. 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.
CIBC World Markets Inc. acted as financial advisor and Davies Ward
Phillips & Vineberg LLP and McCarthy Tétrault LLP acted as legal
advisors to AbitibiBowater.
AbitibiBowater is a global leader in the forest products industry,
producing a diverse range of products, including newsprint, commercial
printing and packaging papers, market pulp and wood products. The
Company owns or operates 18 pulp and paper mills and 24 wood products
facilities located in the United States, Canada and South
Korea. Marketing its products in more than 70 countries, AbitibiBowater
is also among the largest recyclers of old newspapers and magazines in
North America, and has third-party certified 100% of its managed
woodlands to sustainable forest management standards. AbitibiBowater's
shares trade under the stock symbol ABH on both the New York Stock
Exchange and the Toronto Stock Exchange.
Statements in this news release that are not reported financial results
or other historical information of AbitibiBowater are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. They include, for example, statements relating to
our estimates of timing and extent of closure costs and impairment
charges. Forward-looking statements may be identified by the use of
forward-looking terminology such as the words "should," "would,"
"could," "will," "may," "expect," "believe," "anticipate," "attempt"
and other terms with similar meaning indicating possible future events
or potential impact on our business or AbitibiBowater's shareholders.
The reader is cautioned not to place undue reliance on these
forward-looking statements, which are not guarantees of future
performance. These statements are based on management's current
assumptions, beliefs and expectations, all of which involve a number of
business risks and uncertainties that could cause actual results to
differ materially. The potential risks and uncertainties that could
cause our actual financial condition, results of operations and future
performance to differ materially from those expressed or implied in
this press release include risks and uncertainties typically associated
with estimating and quantifying closure costs and impairment charges
and the other risk factors described in our quarterly report on Form
10-Q filed with the SEC on November 15, 2010.
All forward-looking statements in this press release are expressly
qualified by the cautionary statements contained or referred to in this
section and in our other filings with the SEC and the Canadian
securities regulatory authorities. We disclaim any obligation to
publicly update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
SOURCE ABITIBIBOWATER INC. - ENGLISH
For further information:
Vice President, Finance
|Media and Others|
Director, Public Affairs - Canada