ABH (NYSE, TSX)
MONTREAL, Feb. 14 /CNW Telbec/ - AbitibiBowater announced today that it
will permanently close its paper machine at its Coosa Pines, Alabama
operation and cease its pilot project to manufacture recycled
lightweight and ultra lightweight packaging and linerboard grades
within the next 30 days. AbitibiBowater remains committed to its fluff
pulp assets at the facility.
"Coosa Pines has made progress in the production of recycled lightweight
and ultra lightweight packaging and linerboard. Upon review, however,
the substantial capital investment that would be required at the site
to make it low-cost in these grades could not be justified," stated
Richard Garneau, President and Chief Executive Officer.
The Company estimates it will incur cash closure costs of approximately
$4 million related to severance and other closure charges as a result
of the permanent closure of the paper machine at the Coosa Pines mill.
The majority of these closure costs will be paid during the first half
of 2011. A non-cash asset charge of approximately $10 million will be
taken to reflect this permanent closure. Approximately 150 employees
are affected by this closure.
"The decision to cease paper production at the Coosa Pines mill was
difficult as we are mindful of the impact it will have on affected
employees," added Garneau. "The Company also remains committed to
customer service and delivery of high-quality products and will work
closely with customers to ensure a smooth transition."
AbitibiBowater is a global leader in the forest products industry,
producing a diverse range of products, including newsprint, commercial
printing 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
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
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