ABWTQ on watch tomorrow!!! Come out with news close to what got CEMJQ moving on the 29th of april.
AbitibiBowater Inc., North America’s biggest newsprint maker, won final bankruptcy court approval of as much as US$600-million in financing to help fund operations while the company reorganizes.
U.S. Bankruptcy Judge Kevin Carey approved the loan from Fairfax Financial Holdings Ltd. and Avenue Investment LP in a hearing Thursday in U.S. Bankruptcy Court in Wilmington, Del. AbitibiBowater was given approval on April 17 to borrow US$206-million of the US$600-million loan on an interim basis.
The loan “provides much needed capital to the Bowater group,” Kelley Cornish, a lawyer for AbitibiBowater, said when the company got interim approval. “We need it to establish credibility,” and to prevent the company’s competitors from taking away business.
Montreal-based AbitibiBowater and 31 units sought bankruptcy protection April 16 after U.S. lenders refused to accept a proposed debt restructuring. The company listed assets of US$9.9-billion and debt of US$8.78-billion as of Sept. 30 in its Chapter 11 petition.
“The recent downturn in the global economy has resulted in an unprecedented decline in demand for newsprint,” William G. Harvey, AbitibiBowater’s chief financial officer, said in court papers. “Negative trends in advertising, electronic data transmission and storage, and a continued expansion of the Internet, have exacerbated downward pressure on revenue.”
Mr. Harvey said in his affidavit that the loan was “sorely needed.”
AbitibiBowater also sought protection from its creditors in Canada. Quebec Superior Court Judge Clement Gascon on May 6 approved a US$100-million bankruptcy loan, which will be provided by the Bank of Montreal and backed by the Quebec government’s economic development agency. The DIP financing will let Abitibi pay in full all the receivables owed, according to an SEC filing.
AbitibiBowater has 23 pulp and paper mills and 30 wood- products plants in the U.S., Canada, the U.K. and South Korea. The company was formed in October 2007 with the merger of Abitibi-Consolidated Inc. and Bowater Inc. in a stock transaction valued at about US$4.8 billion. The newsprint makers said at the time the combination would cut costs by US$250 million a year.
Bloomberg.com
