Big bucks for AbitibiBowater

Sue Hickey
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Company angling for more than $1 billion for restructuring

It could be one of the biggest life preservers ever tossed to rescue a company from drowning in the oceans of bureaucracy.

AbitibiBowater, former owner of the mill in Grand Falls-Windsor, is looking for a US$1.35-billion hand up. — Telegram file photo

AbitibiBowater, former owners of the closed Grand Falls-Windsor paper mill, is looking to borrow US$1.35 billion to exit bankruptcy and creditor protection in October.

The company, the world’s largest producer of newsprint, plans to repay debt through a combination of cash on hand, $500 million worth of equity to general unsecured creditors and exit financing from either a notes offering or new credit facility to secured creditors.

A $750-million note offering is the preferred option because of favourable market conditions in the high-yield debt markets.

“There’s nothing new there,” said Jean-Philippe Cote, director of public affairs and government relations with AbitibiBowater. “It’s always been part of our restructuring efforts or tools, that we have to have an exit financing component to it.

“There’s nothing new there. It’s always been part of our restructuring efforts or tools, that we have to have an exit financing component to it. Jean-Philippe Cote

“It’s always been publicly stated that exit financing is part of the restructuring plan to successfully emerge. We’re still aiming at emerging (from bankruptcy protection) in the fall.”

“The debtors currently believe that the notes offering will provide them with the best financing terms and greatest operational flexibility upon their emergence from Chapter 11,” said a motion filed Friday in U.S. Bankruptcy Court in Delaware.

However, the company may decide to raise funds through a secured term loan credit facility, depending on market uncertainties.

The company has been under court protection from creditors since April 2009. Creditors will vote on AbitibiBowater’s restructuring plan Sept. 14.

Organizations: AbitibiBowater, U.S. Bankruptcy Court

Geographic location: Delaware.However

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Recent comments

  • John Smith
    August 17, 2010 - 16:04

    Douggie, I have no credit-ability? Maybe you ment credability? Anyway, having an obvious moron like yourself make that comment doesn't lend much credit-ability to you either...LOL Fortis is one of the few good news stories ever to come out of the place. It is a well run, international corp. that employs thousands of NL people, has kept it's headquarters here, and is certainly an entity we should all to be proud of. Abitibi Bowater is a corrupt company that goes into a community already knowing that they will devistate it, after they have raped the resource, and thrown every worker out on thier behinds. You keep on lovin' AB, and I'll keep on respecting Fortis... and we will see who has the most credit-ability in the end...LMAO

    • Douggie
      August 19, 2010 - 13:47

      So you argue that Fortis is good because it's an international corporation and run out of Newfoundland. So, if it were based in Toronto, would you still be waiving your little pom-poms? What if it were based in Montreal? Bigot. And you claim that it doesn't rape resources. Right, just don't ask the people of Belize (I’m not talking about the CEOs and their buddies in the government). I see you took issue with my misspelling. As for your name-calling, I remain undevIstated – unlike the workers who were thrown out on thEIr behinds.

  • John Smith
    August 16, 2010 - 13:25

    Nice to see we have good newfoundlanders like Mark and Don looking out for the best interests of Quebec owned Abitibi Bowater. You remember, that company that used up our resources, let the plants crumble, took all the profit, and left us with the mess to clean up. Yep, glad we have Don and Mark looking out for those poor old giant corporations...give me a break. if anything, these funds should be used to remediate the contamination in Buchans(not expropriated), Stephenville(not expropriated) and The docks(not expropriated). However, being the greedy, underhanded corrupt company they are we will never see any money from them, and so we will be left to clean up these sites ourselves. Thank God Williams saw fit to expropriate the Mill timber and water this Quebec company couldn't sell these off as well. thanks Don and Mark...hope your moving to Quebec soon.

    • Douggie
      August 16, 2010 - 17:02

      Whereas Fortis, on the other hand... John, you have no creditability here.

  • Don Lester
    August 16, 2010 - 10:55

    I hope Abitibi will pay the Newfoundland government what it owes and what the severance pay they provided the employees.

  • Brendan White
    August 16, 2010 - 10:16

    I can see the headline now for Don's comment. "Exploiting the expropriation on the Exploits." Do I detect some anti-government sentiment here?

  • William Daniels
    August 16, 2010 - 10:00

    Abitibi is going to take Danny and NL to the cleaners. The likes will never have been seen. NL will be lucky to recover.

  • Don
    August 16, 2010 - 09:12

    Great news for Abitibi. When will the Government of Canada be paying the Five Hundred Million dollars that is owed to Abitibi by the Government of Newfoundland for expropriating their Mill, hydro-electric plant and properties which further damaged the Company? I hope NAFTA awards Abitibi the amounts due in the near future. When will the Government of Newfoundland compensate Abitibi for the damage it caused to the Company?

    • pat
      August 16, 2010 - 14:11

      Hey, Don you missed your "Mark" by about 40 seconds ,,we can all see through those two comments. Guess you should be standing behind Mike Duffy (a strong supporter of Abitibi) at the buffet and you will probably get as much as Newfoundland got over the last 100 years from. the Greed crew at Abitibi. Anyone who crys for this crew is obviously on the payroll. Toooo bad. Go Danny Go.

  • Mark
    August 16, 2010 - 08:58

    Creditors will likely approve. They know that the company stands to get millions in compensation for Danny Williams' expropriative temper tantrum, and it represents their best chance of recuperating some of their money in the short to medium term.