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Unnamed investor backs AbitibiBowater recapitalization with $100M


March 17, 2009
By Pulp & Paper Canada

In addition to its recently announced recapitalization plan, AbitibiBowater announced Monday a new investor has agr…

In addition to its recently announced recapitalization plan, AbitibiBowater announced Monday a new investor has agreed to provide a backstop commitment of $100 million.

 

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While the amount of the commitment was reported at $100 million, the final amount depends on the extent to which unsecured noteholders participate in the concurrent offering.

 

The unidentified investor will receive up to $111.1 million in new notes and up to 63.5 million series D warrants to purchase company stock at $1.25 per share for the commitment.

 

In addition, the backstop party will receive a backstop commitment fee of $50 in first lien notes and 53.895 series A warrants, 53.895 series B warrants and 53.895 series C warrants for each $1,000 committed once AbitibiBowater’s recapitalization plan is completed.

 

AbitibiBowater said noteholders with approximately $164 million in unsecured notes have agreed to vote in favour of the recapitalization program, bringing the total support to approximately $1.2 billion. It will also continue to solicit additional support for the recapitalization from affected noteholders and lenders, the company said.

 

AbitibiBowater’s recapitalization plan aims to cut debt by $2.4 billion and improve its financial structure.


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