AbitibiBowater Submits NAFTA Notice of Intent in Response to Illegal Expropriation of Rights and Assets in Newfoundland and Labrador

    ABH (TSX)

    MONTREAL, April 23 /CNW Telbec/ - AbitibiBowater today filed a Notice of
Intent to Submit a Claim to Arbitration under the North American Free Trade
Agreement ("NAFTA") with regards to the expropriation of its assets and rights
in Newfoundland and Labrador, Canada. It is the Company's position that the
passing of Bill 75, which expropriates the Company's provincial assets and
contractual rights to natural resources, by the provincial government was
arbitrary, discriminatory and illegal. AbitibiBowater is seeking in excess of
CDN$300 million in direct compensation for the fair market value of the
expropriated rights and assets, plus additional costs and further relief as
the Arbitral Tribunal may deem just and appropriate.
    In early December 2008, AbitibiBowater announced various
capacity-reduction measures, including the permanent closure of its Grand
Falls mill, as a result of the economic downturn and decline in product
demand. In retaliation, the province hastily passed Bill 75, without any
attempt to consult with the Company and without holding any public hearings.
    The Company has asserted in the Notice of Intent that Bill 75
unquestionably breaches Canada's NAFTA obligations on a number of grounds,
including among others:

    - Basis of Expropriation: NAFTA explicitly details the grounds under
      which government expropriation can occur. The criteria for
      expropriation are not met in Bill 75.
    - Fair Compensation: AbitibiBowater is entitled to immediate, full and
      fair compensation. Bill 75 does not ensure payment for the fair market
      value of the expropriated rights and assets.
    - Denial of Justice: Bill 75 purports to strip AbitibiBowater of any
      rights to access the courts, which is independently a violation of
    - Discrimination: AbitibiBowater should be afforded the same rights and
      privileges as all other domestic and foreign investors. Bill 75 is
      retaliatory in nature and discriminates against the Company.

    "AbitibiBowater has been operating in Newfoundland and Labrador for more
than a century, contributing significantly to the region's economic, social
and sustainable development," stated David J. Paterson, President and Chief
Executive Officer. "The nationalization of our assets was unexpected and an
unnecessary course of action. It came despite our proactive outreach to form a
joint working group to address and resolve all issues related to our rights
and assets in the province. The Company remains open to seeking a
collaborative resolution with the federal and provincial governments."
    The expropriation relates to a broad range of AbitibiBowater's rights in
Newfoundland and Labrador, including land rights, timber rights, water use
rights and various other related rights and business partnerships, and these
rights can be traced back in part to grants by the provincial government and
its predecessors, as well as to other third-party transactions. In addition to
the substantial sums it expended to acquire these rights, the Company has
invested hundreds of millions of dollars in the province over the last
century, ranging from capital investments in mill operations to road projects
that have helped build rural Newfoundland.
    Since the Company is incorporated in the state of Delaware and carries
out business activities in the United States, the expropriation of rights and
assets represents a breach of Canada's obligations to a U.S. investor under
Chapter Eleven of NAFTA. The Company has filed this notice as part of the
dispute resolution mechanism available under NAFTA and will submit the claim
to arbitration in three months, pursuant to the relevant NAFTA provisions,
should this matter not be resolved by that date.
    "It is our obligation to defend the interests of our shareholders and
ensure we receive compensation for the fair market value of the expropriated
assets, plus additional damages. With this notice, we have taken the first
step in pursuing legal actions," added David Paterson.
    Media should take note that copies of the Notice of Intent under Chapter
Eleven of NAFTA are available upon request. The following paragraphs may be of

    NAFTA Provisions Breached:                             Paragraphs 6-7
    Underlying Facts:                                      Paragraphs 8-11
    About AbitibiBowater:                                  Paragraphs 12-17
    AbitibiBowater's History and Rights in the Province:   Paragraphs 18-29
    Additional Investments:                                Paragraphs 30-33
    The Hydro Assets:                                      Paragraphs 34-41
    The Grand Falls Mill Closure Plan:                     Paragraphs 42-51
    The Province's Ultimatum:                              Paragraphs 52-54
    The Province's "Justifications":                       Paragraphs 55-58
    Expropriation:                                         Paragraphs 59-67
    Denial of Justice:                                     Paragraphs 68-69
    Lack of Compensation:                                  Paragraphs 70-71
    NAFTA Violations:                                      Paragraphs 72-86
    Relief Sought:                                         Paragraph 87

    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 23 pulp and paper facilities and 30 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 third-party
certified 100% of its managed woodlands to sustainable forest management
standards. AbitibiBowater's shares trade over-the-counter on the Pink Sheets
under the stock symbol ABWTQ.

For further information:

For further information: Investors: Duane Owens, Vice President,
Finance, (864) 282-9488; Media and Others: Seth Kursman, Vice President,
Communications and Government Affairs, (514) 394-2398,

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890