US$
ABH (NYSE, TSX)
MONTREAL, March 2 /CNW Telbec/ - AbitibiBowater Inc. today announced that
Bowater Incorporated ("Bowater"), a subsidiary of AbitibiBowater, Bowater
Newsprint South LLC ("Newsprint South"), a subsidiary of AbitibiBowater, and
certain of Bowater's subsidiaries and affiliates, entered into amendments to
Bowater's U.S. and Canadian credit agreements. The amendment to the U.S.
credit agreement was entered into among AbitibiBowater, Bowater, Newsprint
South and certain subsidiaries and affiliates of Bowater and Newsprint South,
certain lenders party thereto and Wachovia Bank, National Association, as
Administrative Agent for the various lenders under that credit agreement. The
amendment to the Canadian credit agreement was entered into among
AbitibiBowater, Bowater, Bowater Newsprint South, Bowater Canadian Forest
Products Inc. ("BCFPI"), an indirect subsidiary of Bowater, and certain
subsidiaries and affiliates of Bowater, Newsprint South and BCFPI, certain
lenders party thereto and The Bank of Nova Scotia, as Administrative Agent for
the lenders party to that credit agreement.
The amendments to the credit agreements provide for lender consent to
$12,000,000 of additional liquidity previously provided to BCFPI by Fairfax
Financial Holdings Limited (the "Additional Liquidity") and amend and modify
each of Bowater's U.S. and Canadian credit agreements to, among other things,
(i) increase the commitment under the Canadian credit agreement in an
aggregate amount of $30,000,000 in order to add two additional tranches of
loans (the "Additional Loans"), one tranche in the principal amount of
$12,000,000, representing the Additional Liquidity previously funded, and the
other in the principal amount of $18,000,000, representing loans funded upon
the closing of the amendments, (ii) provide that the Additional Loans are not
subject to the borrowing base requirements contained in the Canadian credit
agreement, (iii) allow the collateral securing the Canadian credit agreement
(other than certain fixed assets of Newsprint South and certain of its
subsidiaries) to secure the Additional Loans on a last-out basis, (iv)
temporarily increase the limit on the amount of foreign accounts receivable
that may be included in the borrowing base, (v) modify the scheduled
reductions to the commitment amounts under each agreement and (vi) increase
the interest rate under each agreement by 1.00%.
AbitibiBowater produces a wide range of newsprint, commercial printing
papers, market pulp and wood products. It is the eighth largest publicly
traded pulp and paper manufacturer in the world. AbitibiBowater owns or
operates 24 pulp and paper facilities and 30 wood products facilities located
in the United States, Canada, the United Kingdom and South Korea. Marketing
its products in more than 90 countries, the Company is also among the world's
largest recyclers of old newspapers and magazines, and has third-party
certified 100% of its managed woodlands to sustainable forest management
standards. AbitibiBowater's shares trade under the stock symbol ABH on both
the New York Stock Exchange and the Toronto Stock Exchange.
Forward-Looking Statements
--------------------------
Statements in this news release that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. They include,
for example, statements about our ability to comply with the terms of
Bowater's credit facility, and our strategies for achieving our goals
generally. Forward-looking statements may be identified by the use of
forward-looking terminology such as the words "should," "would," "could,"
"may," "expect," "believe," "anticipate," and other terms with similar meaning
indicating possible future events or potential impact on the business or
stockholders of AbitibiBowater.
The reader is cautioned not to place undue reliance on these
forward-looking statements, which are not guarantees of future performance.
These statements are based on management's current assumptions, beliefs and
expectations, all of which involve a number of business risks and
uncertainties that could cause actual results to differ materially. These
risks and uncertainties include, but are not limited to, industry conditions
generally and further growth in alternative media, our ability to realize
announced price increases, the impact of the global credit crisis on our
ability to refinance or amend the terms of our current indebtedness, our
ability to obtain timely contributions to our cost-reduction initiatives from
our unionized and salaried employees, the prices and terms under which we
would be able to sell targeted assets, the volatility of the U.S. dollar
against the Canadian dollar, the costs of raw materials such as energy,
chemicals and fiber, the success of our post-merger integration activities,
including the rollout of information technology platforms and billing and
procurement systems as well as the impact of our liquidity position on the
relationship with our customers, vendors and trade creditors. Additional
factors are detailed from time to time in AbitibiBowater's filings with the
Securities and Exchange Commission (SEC) and the Canadian securities
regulatory authorities, including those factors contained in the Company's
Annual Report on Form 10-K/A for the year ended December 31, 2007, filed with
the SEC on March 20, 2008, and the Company's Quarterly Report on Form 10-Q for
the period ended September 30, 2008, filed with the SEC on November 14, under
the caption "Risk Factors" in each respective report, as well as those factors
contained in AbitibiBowater's Current Report on Form 8-K filed on February 9,
2009. All forward-looking statements in this news release are expressly
qualified by information contained in the Company's filings with the SEC and
the Canadian securities regulatory authorities. AbitibiBowater disclaims any
obligation to update or revise any forward-looking information.
