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AbitibiBowater seeks permission to sell four closed mills, machinery (April 27, 2010)

Newsprint producer AbitibiBowater is asking the bankruptcy court for approval to sell four closed mills and th…

Newsprint producer AbitibiBowater is asking the bankruptcy court for approval to sell four closed mills and their machinery to Montreal-based American Iron & Metal, according to a Canadian Press news report on April 19.
The scrap metal company would buy to assets for $8.7 million. The deal includes the mills at Beaupre, Que., Donnacona, Que., Thunder Bay, Ont., and Dalhousie, N.B. CP reports that American Iron would also pay AbitibiBowater 40% of the money raised from the sale of the paper machines. Even if they are sold for scrap, American Iron would pay at least $5 million.
The metals company would assume all environmental liabilities associated with the closed mills. The company has said it’s open to ideas to reuse the vacant mills, but one condition set by AbitibiBowater is that the locations not be used to produce paper.
American Iron’s owner Herbert Black told CP the buildings may be scrapped for their metal value, and some of the paper machines may suffer the same fate.
AbitibiBowater is also looking to sell three closed mills in Quebec. The mills in Roberval, Saint-Fulgence and Lebel-sur-Quevillon have been closed since last year.
North America’s largest newsprint producer hopes to exit court protection from creditors in Canada and the United States by autumn.