In an effort to reduce its debt and improve its overall financial standing, AbitibiBowater has launched the second …
In an effort to reduce its debt and improve its overall financial standing, AbitibiBowater has launched the second phase of Abitibi Consolidated Inc.’s recapitalization program.
In 2007, Abitibi Consolidated and Bowater Inc. merged to form AbitibiBowater. The company is headquartered in Montreal, Quebec.
The recapitalization aims to reduce AbitibiBowater’s debt by $2.4 billion and increase liquidity.
The plan includes converting $2.8 billion of unsecured notes into a mix of new notes, shares of common stock and warrants, as well as a concurrent offering of approximately $389 million of First Lien Notes and 222.2 million Series D Warrants.
AbitibiBowater also plans to repay its $413 million 13.75% secured notes, which are due in 2011, and any accrued and unpaid interest.
“With this comprehensive recapitalization, AbitibiBowater is significantly reducing its debt levels and improving its liquidity,” said AbitibiBowater chairman of the board of directors Dick Evans in a press release. “The board and management believe this solution creates a stronger company in the interest of all stakeholders, and allows the company to move forward with confidence to meet the needs of its customers.”
Last week, AbitibiBowater also announced it will sell its 60% interest the Manicouagan Power Company to Hydro-Quebec for gross proceeds of $615 million. The hydro-electric facility is located on the Manicouagan River in Quebec.
“This transaction is a key step in AbitibiBowater’s overall plan to ensure greater liquidity and financial flexibility,” stated AbitibiBowater president and CEO David J. Paterson. “De-leveraging the company’s balance sheet is important to all AbitibiBowater stakeholders.”
AbitibiBowater hopes to begin the recapitalization plan by May, following final Quebec Superior Court approval.
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