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Fibrek receives Abitibi shares as compensation for cancelled contract

A subsidiary of kraft pulp producer Fibrek Inc. will receive 236,226 common shares of AbitibiBowater Inc., pursuant to the procedures undertaken by Abitibi under the Companies’ Creditors Arrangement Act. The shares are compensation for…

A subsidiary of kraft pulp producer Fibrek Inc. will receive 236,226 common shares of AbitibiBowater Inc., pursuant to the procedures undertaken by Abitibi under the Companies’ Creditors Arrangement Act. The shares are compensation for cancellation of a woodchip supply agreement cancelled by Abitibi.

Fibrek is entity formed last year when the SFK Pulp Fund converted from an income fund to a corporation. It operates kraft pulp mills in St. Felicien, Que., Fairmont, West Virginia, and Menominee, Michigan.

As an unsecured creditor of Abitibi-Consolidated Company of Canada, a subsidiary of Abitibi, Fibrek GP filed a claim in the amount of $45 million as compensation for the repudiation of a wood chip supply contract.

As part of AbitibiBowater’s plan of reorganization, a total of 20,498,391 ABH shares will be issued to Abitibi-Consolidated’s unsecured creditors.