AbitibiBowater Inc. has obtained approval of a backstop commitment agreement by the U.S. bankruptcy courts in …
AbitibiBowater Inc. has obtained approval of a backstop commitment agreement by the U.S. bankruptcy courts in connection with its creditor protection proceedings and exit financing efforts.
The company announced in May that it had secured a backstop commitment from certain unsecured noteholders for a rights offering of up to $500 million.
In this rights offering, AbitibiBowater would offer new convertible notes with a seven-year maturity from the date of closing to eligible unsecured creditors. When the plan takes effect, the notes would be obtained upon exercise of the rights and convertible into common stock of the emerged company.
“This is another important step forward as we look ahead to the company’s ultimate emergence from credit protection scheduled for early this fall,” stated David J. Paterson, president and CEO.
Before emerging from creditor protection, the company must obtain adequate exit financing and complete efforts to address labor costs and pension issues, as well as satisfy other conditions set forth in the plans of reorganization.
AbitibiBowater expects to mail out the court-approved disclosure and voting materials in July.
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