ABH (NYSE, TSX)
    US$

    MONTREAL, Feb. 9 /CNW Telbec/ - AbitibiBowater Inc. ("AbitibiBowater")
announced today the commencement of private offers (the "Exchange Offers") to
exchange certain outstanding series of unsecured notes (the "Existing Notes")
issued by its Bowater Incorporated ("Bowater") subsidiary (or by a subsidiary
of Bowater), in a private placement, for new notes (the "Exchange Notes")
described below. The eligible series of Existing Notes consist of:- 9.00% Debentures due 2009 (the "2009 Notes");
    - Floating Rate Senior Notes due 2010 (the "2010 Notes");
    - 7.95% Notes due 2011 issued by Bowater Canada Finance Corporation, a
      wholly-owned subsidiary of Bowater (the "2011 Notes");
    - 9.50% Debentures due 2012 (the "2012 Notes");
    - 6.50% Notes due 2013 (the "2013 Notes"); and
    - 9.375% Debentures due 2021 (the "2021 Notes").

    The Exchange Notes will be issued by Bowater Finance II LLC ("Bowater
Finance"), an indirect wholly owned subsidiary of AbitibiBowater, and will
consist of:

    - 10.00% Second Lien Notes due January 31, 2012; and
    - 10.50% Third Lien Notes due March 31, 2012.

    The Exchange Offers are being made only to qualified institutional buyers
inside the United States and to certain non-U.S. investors located outside the
United States ("Eligible Holders").
    The Company is also soliciting consents (the "Consent Solicitation") to
amend the indentures governing the Existing Notes to eliminate the covenants
in such indentures relating to liens, secured debt and sale/leaseback
transactions.
    The Exchange Offers and Consent Solicitation will expire at 11:59 p.m.,
New York City time, on March 9, 2009, unless extended (the "Expiration Date").
Tendered Existing Notes may be validly withdrawn at any time prior to the
Expiration Date but not thereafter.
    Concurrently with the Exchange Offers and the Consent Solicitation,
Bowater Finance is offering to Eligible Holders of Existing Notes, in a
"Concurrent Notes Offering," new 15.50% First Lien Notes due November 15, 2011
(the "First Lien Notes," and together with the Exchange Notes, the "New
Notes"). Holders of Existing Notes that tender some or all of their Existing
Notes in the Exchange Offers will have the right, but not the obligation, to
subscribe for a portion of the First Lien Notes being offered in the
Concurrent Notes Offering.
    Holders that subscribe for First Lien Notes in the Concurrent Notes
Offering will receive consideration consisting of an additional principal
amount of Exchange Notes for their Existing Notes tendered and accepted in the
Exchange Offers and a subscription fee payable in an additional principal
amount of First Lien Notes. The maximum aggregate subscription amount for
First Lien Notes that will be accepted in the Concurrent Notes Offering (i.e.,
cash proceeds to the issuer) is $211.2 million.
    Separately, Bowater Finance has entered into a note purchase agreement
with a private institutional investor pursuant to which the investor has
agreed to purchase, on a private placement basis, $80 million principal amount
of First Lien Notes for a purchase price of $80 million. Such offer is a
separate private placement of First Lien Notes to the institutional investor
in addition to the Concurrent Notes Offering, and will be made contemporaneous
with and contingent upon the Exchange Offers and the Concurrent Notes
Offering.
    Net cash proceeds from both the Concurrent Notes Offering and the
additional private placement will be used to repay amounts outstanding under
Bowater's bank credit facilities.
    For each $1,000 principal amount of Existing Notes validly tendered (and
not validly withdrawn) and accepted for exchange and for which the holder
elects to subscribe for First Lien Notes in the Concurrent Notes Offering (a
"Subscribing Tender"), such holder will receive the principal amount and form
of Exchange Notes shown in the table below.

    SUBSCRIBING TENDERS
    -------------------------------------------------------------------------

    EXISTING NOTES           PRINCIPAL AMOUNT OF      FORM OF
    TENDERED                 EXCHANGE NOTES           EXCHANGE NOTES(1)
    -----------------------  -----------------------  -----------------------
     2009 NOTES               $800                     SECOND LIEN NOTES
     2010 NOTES               $700                     THIRD LIEN NOTES
     2011 NOTES               $650                     THIRD LIEN NOTES
     2012 NOTES               $600                     THIRD LIEN NOTES
     2013 NOTES               $575                     THIRD LIEN NOTES
     2021 NOTES               $550                     THIRD LIEN NOTES

    (1) Not including First Lien Notes subscribed for in Concurrent Notes
        Offering.

    For each $1,000 principal amount of Existing Notes validly tendered (and
not validly withdrawn) and accepted for exchange and for which the holder does
not elect to subscribe for First Lien Notes in the Concurrent Notes Offering
(a "Non-Subscribing Tender"), such holder will receive the principal amount
and form of Exchange Notes shown in the table below.

    NON-SUBSCRIBING TENDERS
    -------------------------------------------------------------------------

    EXISTING NOTES           PRINCIPAL AMOUNT OF      FORM OF
    TENDERED                 EXCHANGE NOTES           EXCHANGE NOTES
    -----------------------  -----------------------  -----------------------
     2009 NOTES               $750                     THIRD LIEN NOTES
     2010 NOTES               $650                     THIRD LIEN NOTES
     2011 NOTES               $600                     THIRD LIEN NOTES
     2012 NOTES               $550                     THIRD LIEN NOTES
     2013 NOTES               $525                     THIRD LIEN NOTES
     2021 NOTES               $500                     THIRD LIEN NOTESThe Exchange Offers are conditioned upon, among other things, there being
validly tendered and not validly withdrawn on or prior to the Expiration Date,
greater than 97% in aggregate principal amount of 2009 Notes and 2010 Notes,
and greater than 50% in aggregate principal amount of 2011, 2012, 2013 and
2021 Notes. However, this condition may be waived by Bowater Finance under
certain circumstances. In addition, Bowater Finance has the right to terminate
or withdraw any of the Exchange Offers at any time and for any reason,
including if any of the conditions is not satisfied.
    The New Notes will be senior secured obligations of Bowater Finance, and
will be guaranteed by AbitibiBowater, Bowater, Bowater Newsprint South LLC
("Newsprint South"), a wholly owned subsidiary of AbitibiBowater, and by
certain other subsidiaries of Bowater and Newsprint South.
    Except as provided in the next sentence, the New Notes have not been and
will not be registered under the Securities Act of 1933 or any state
securities laws, may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements, and
will therefore be subject to substantial restrictions on transfer. Bowater
Finance will enter into a registration rights agreement pursuant to which it
will agree to file an exchange offer registration statement with the
Securities and Exchange Commission with respect to the New Notes.
    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any security and shall not constitute an
offer, solicitation or sale in any jurisdiction in which such offering,
solicitation or sale would be unlawful. This announcement is also not a
solicitation of consents to the proposed amendments to the respective
indentures.

    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 25 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, AbitibiBowater 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 press 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 AbitibiBowater's refinancing plans, the terms of
the Exchange Offers and the timeframe for its completion. Forward-looking
statements may be identified by the use of forward-looking terminology such as
the words "expect," "plan," "intend," "may," "will," and other terms with
similar meaning indicating possible future events or potential impact on the
business or other stakeholders of AbitibiBowater and its subsidiaries.
    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, the ability to obtain
additional new financing on terms satisfactory to AbitibiBowater and Bowater
or at all, the condition of the U.S. credit markets generally and worsening
industry conditions. Additional factors are detailed from time to time in
AbitibiBowater's and Bowater's filings with the Securities and Exchange
Commission (SEC), including 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 AbitibiBowater's and Bowater's filings with the SEC.
AbitibiBowater disclaims any obligation to update or revise any
forward-looking information.