AbitibiBowater pension deal ensures it will meet obligations in Ontario, Quebec
By Pulp & Paper Canada
By Pulp & Paper Canada
As part of its restructuring process, AbitibiBowater has finalized agreements with the government of Ontario related to funding relief for the solvency deficits in pension plans. The company had earlier reached a similar agreement with the…
As part of its restructuring process, AbitibiBowater has finalized agreements with the government of Ontario related to funding relief for the solvency deficits in pension plans. The company had earlier reached a similar agreement with the government of Quebec. The agreements will allow the company to meet its future pension obligations in full to beneficiaries.
“The best way to ensure pension benefits continue to be paid out is to ensure a company stays in business. We are pleased that AbitibiBowater will continue to operate, that thousands of Ontarians will continue to be employed, and that existing pensioners will continue to receive their benefits,” stated Dwight Duncan, Ontario Minister of Finance.
In addition, the Ontario government has reached a five-year agreement with what will become one of AbitibiBowater’s Canadian subsidiaries post-emergence, AbiBow Canada, regarding investment levels, governance and sustainability at its pulp and paper operations in the province.
This agreement will become effective when AbitibiBowater emerges from creditor protection, which is expected to happen before the end of the year. The deal will be re-evaluated at the end of the initial five-year term, considering the company’s situation, the conditions affecting the pulp and paper industry as a whole and the solvency of its pension plans.
“We have signed today an agreement that is a significant step toward our emergence. We are convinced we have obtained the best deal possible for all our employees and retirees in Canada, and we would like to thank the government of Ontario for its ongoing support,” stated David J. Paterson, president and CEO of AbitibiBowater.
The company directly employs approximately 8,500 workers and has in the order of 20,000 pensioners in Ontario and Quebec. These agreements are subject to AbitibiBowater’s and its subsidiaries’ emergence from creditor protection, which is expected to occur this fall, and is subject to confirmation of its U.S. plan of reorganization.
AbitibiBowater produces a wide range of newsprint, commercial printing and packaging papers, market pulp and wood products. It owns or operates 19 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea.