Federal government pays $130 million to settle AbitibiBowater expropriation
August 25, 2010 By Pulp & Paper Canada
The Government of Canada will pay AbitibiBowater $130 million in compensation for the expropriation of the com…
The Government of Canada will pay AbitibiBowater $130 million in compensation for the expropriation of the company’s assets in Newfoundland and Labrador, considering that amount fair market value for the newsprint mill, water and timber rights, power plants and hydro infrastructure. As part of the settlement, AbitibiBowater will withdraw its request for NAFTA arbitration on the issue. The payment will be made after AbitibiBowater completes its restructuring.
Premier Danny Williams of Newfoundland says his province, which took possession of the assets in March 2009, will not repay the federal government for the settlement. Williams is unrepentant concerning the hasty expropriation, according to a story by the Canadian Press appearing in the Winnipeg Free Press on Aug. 25. Williams also says he’d do nothing differently – except for the accidental seizure of the mill itself.
In a joint statement, the Department of Foreign Affairs and International Trade Canada said: “The Government of Canada has resolved this dispute for the benefit of Canada’s long-term economic interests. In reaching this agreement, the Government of Canada is avoiding potentially long and costly legal proceedings.”
“We believe this is an acceptable settlement for our company, stakeholders and creditors, given the set of circumstances faced by the company at this particular time as well as the inherent uncertainty of any judicial process,” stated David J. Paterson, president and CEO. “We are now able to move forward and focus on finalizing our restructuring process and plans to emerge from creditor protection in the fall 2010.”
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