AbitibiBowater secures waiver from lenders
April 9, 2009 By Pulp & Paper Canada
AbitibiBowater Inc. says some of its lenders have granted its Abitibi-Consolidated unit a waiver, after it failed t…
AbitibiBowater Inc. says some of its lenders have granted its Abitibi-Consolidated unit a waiver, after it failed to meet the requirements under a $210 million receivables purchase agreement, according to Reuters.
The Reuters report explains that AbitibiBowater ran afoul of the terms within the receivables purchase agreement (RPA) after a spike in delinquency ratios and a delay in providing certain financial statements to its lenders.
The waiver and amendment granted by Citibank and Eureka Securitisation extends the termination date of the loan to Sept. 1 and increases the delinquency ratios permitted by the RPA.
The newsprint producer is scrambling to restructure its debt, which is held largely by its Abitibi-Consolidated and Bowater subsidiaries.
Reuters reports that the waiver and amendments granted by the lenders would terminate immediately if the company fails to deliver its financial statements by April 30.
AbitibiBowater will pay its lenders a fee equal to 6 percent of $210 million, as a consideration for the waiver and amendments.
Last week, AbitibiBowater said it was evaluating new restructuring alternatives after the $1.8 billion debt exchange offer for its Bowater subsidiary failed to get sufficient support from lenders.
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