US$
ABH (NYSE, TSX)
MONTREAL, Nov. 14 /CNW Telbec/ - AbitibiBowater Inc. today announced that
its subsidiaries Bowater Canadian Forest Products Inc. ("BCFPI") and Bowater
Incorporated ("Bowater") as well as the other parties to Bowater's U.S. and
Canadian credit facilities, had entered into amendments to those facilities
which, among other things: (1) waive the requirement that Bowater and BCFPI
are required to comply immediately with the more restrictive borrowing base
requirements by November 15, 2008 and providing instead for phased-in
implementation through March 31, 2009 (extending to April 29, 2009 under
certain circumstances) and waive compliance with certain financial covenant
requirements for the third quarter of 2008; (2) amend certain covenants,
including the leverage ratio, for the fourth quarter of 2008; (3) increase the
interest rate under each facility by 125 basis points; (4) provide a lien on
substantially all Canadian fixed assets and the shares of BCFPI's South Korean
subsidiary (which operates BCFPI's Mokpo mill) to Canadian lenders, as
security for indebtedness in a principal amount not to exceed 10% of the
shareholders' equity of BCFPI as of September 30, 2008; (5) add a provision
requiring that 75% of the proceeds of asset sales by Bowater or its
subsidiaries, including BCFPI, be used to reduce amounts outstanding under
both facilities on a pro rata basis; (6) reduce, pro rata, the aggregate
amount of the commitment under both facilities by US$10 million; and (7)
require that Bowater and certain of its affiliates (including BCFPI) maintain
no more than $70 million of cash on hand on a combined consolidated basis,
with any excess to be used to reduce amounts outstanding under the credit
facilities.
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 34 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 more third-party
certified sustainable forest land than any other company in the world.
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 continued strength 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. 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.
