News Releases

    • AbitibiBowater Announces Phase 1 of Action Plan to Address Company Challenges
          ABH (TSX, NYSE)
          US$- Reduces Paper Production Capacity by Approximately 1 Million Metric
          - Increases Synergy Target to $375 Million
          - Targets $500 Million from Asset Sales
          - Suspends Dividend
          - Requests Reopening of Canadian Union Contracts
          - Initiates Phase 2 Comprehensive ReviewMONTREAL, Nov. 29 /CNW Telbec/ - Following the initial phase of a
      comprehensive strategic review, the Board of Directors of AbitibiBowater Inc.
      has reviewed Management's recommendations and approved the following actions.
          Phase 1
          The Company will reduce its newsprint and commercial printing papers
      production capacity by approximately 1 million metric tons per year during the
      first quarter of 2008. The reductions include the permanent closure of the
      Belgo (Shawinigan, Québec) and Dalhousie (New Brunswick) mills, as well as the
      indefinite idling of the Donnacona (Québec) and Mackenzie (British Columbia)
      paper mills. The Company will also indefinitely idle two Mackenzie sawmills
      directly supporting the Mackenzie paper operation. These facilities are not
      generating positive cash flows and are not expected to do so in the
      foreseeable future. They represent approximately 600,000 metric tons of
      newsprint, 400,000 metric tons of commercial printing papers, and 500 million
      board feet of lumber capacities. In spite of these capacity reductions,
      AbitibiBowater expects to continue growing its international newsprint sales
      in line with offshore market expansions.
          Additionally, the Company will permanently close the previously idled
      Fort William (Thunder Bay, Ontario) and Lufkin (Texas) paper mills, as well as
      the #3 Paper Machine at the Gatineau (Québec) facility. The previously idled
      operations had a total capacity of approximately 650,000 metric tons.
          The Company also announced that it has raised its targeted synergies
      stemming from the merger to $375 million. "We are confident that we can
      achieve the original $250-million run rate by the end of the first quarter of
      2009, and realize an additional $125 million within our originally announced
      two-year time frame, which extends through the end of 2009," said Executive
      Chairman John W. Weaver.
          As part of the action plan unveiled today, AbitibiBowater is reaching out
      to both unionized and salaried employees to contribute to cost-reduction
      initiatives. The Company is asking its Canadian union partners to reopen
      current labor agreements and explore ways to reduce overall labor costs and
      provide enhanced flexibility in the workplace. The salaried workforce will be
      impacted by on-going benefits harmonization.
          With regard to the capacity reductions, the Company evaluated a range of
      options. "These were difficult decisions that were made after careful
      deliberation and represent the best course of action given the current
      economic conditions and significant challenge that lies before us. We are
      mindful of the impact these decisions will have on the employees and
      communities affected, and will be working with them to help mitigate the
      effects," said President and Chief Executive Officer David J. Paterson. "We
      are confident, however, that, as a result of the actions, AbitibiBowater will
      become a stronger, more globally competitive organization. I believe the
      initiatives unveiled today underscore our determination to adapt to today's
      rapidly changing market realities."
          Overall, the Company is targeting $500 million from asset sales,
      including non-core facilities, U.S. timberlands and the newsprint mill at
      Snowflake (Arizona), which must be divested under the terms of the agreement
      reached with the United States Department of Justice for approval of the
      Abitibi-Consolidated/Bowater combination. Proceeds will be used to support the
      three-year, $1-billion debt-reduction target.
          Given the Company's focus on debt reduction, after careful deliberation,
      the Board of Directors has decided to suspend the dividend to shareholders.
      The Company will revisit this decision once clear progress has been made to
      achieve its financial targets.
          The Company estimates it will incur cash closure costs of approximately
      $100 million related to severance and other closure charges as a result of
      these actions. Approximately $30 million of these closure costs will not
      impact AbitibiBowater earnings and will be recorded as liabilities in the
      purchase price allocation of its subsidiary, Abitibi-Consolidated Inc., as
      they relate to facilities owned by Abitibi-Consolidated. In addition, the
      Company estimates it will incur an after-tax asset impairment charge of
      approximately $110-$130 million in the fourth quarter related to Bowater
      Incorporated assets. An additional estimated $230-$270 million after-tax
      impairment charge related to assets owned by Abitibi-Consolidated is not
      expected to impact consolidated fourth quarter AbitibiBowater earnings as it
      will be eliminated by the fair value adjustments recorded in the purchase
      price allocation.
          Phase 2
          Over the next four months, the Company will undertake a comprehensive
      review of all aspects of the business in an effort to further reduce costs,
      improve its manufacturing platform and better position the Company in the
      global marketplace. The Company will be reaching out to various stakeholders
      in an effort to address challenges, which are exacerbated by the rapid rise of
      the Canadian dollar.
          Given the specific pressures in Eastern Canada relative to wood
      availability, energy and labor, a second phase of closures could take place by
      mid-2008. Final decisions regarding the actions to be taken and the locations
      impacted will be confirmed in the second quarter of 2008.
          Furthermore, over the next four months, AbitibiBowater will also be
      conducting an in-depth review of its wood products business with the objective
      of selling non-core assets, consolidating facilities where appropriate and
      curtailing or closing non-contributing operations.
          Immediate challenges notwithstanding, AbitibiBowater remains intent on
      conducting its business with an unsurpassed commitment to sustainability,
      reflecting its ongoing commitment to environmental responsibility, social
      desirability and economic viability.
          The difficult steps announced today are part of a comprehensive road map
      designed to better position the Company for the future, an objective that is
      clearly in the long-term best interests of all AbitibiBowater stakeholders -
      employees, shareholders, suppliers, customers and communities alike.
          Investor Call
          A conference call hosted by management to discuss this announcement will
      be held today at 4:30 PM (Eastern). Interested parties should dial
      514-868-1042 or 866-898-9626 10 minutes before the beginning of the call,
      which will be webcast at, under the "Investors"
          Participants not able to listen to the live conference call can access a
      replay, which also will be available on the "Investors" section of Company's
      website beginning an hour after the conclusion of the call and continuing
      until December 6, 2007, by dialing 514-861-2272 (passcode 3244150).
          AbitibiBowater produces a wide range of newsprint and commercial printing
      papers, market pulp and wood products. It is the eighth largest publicly
      traded pulp and paper manufacturer in the world. Following the required
      divestiture agreed to with the U.S. Department of Justice, AbitibiBowater will
      own or operate 29 pulp and paper facilities and 35 wood products facilities
      located in the United States, Canada, the United Kingdom and South Korea.
      Marketing its products in more than 80 countries, the Company is also among
      the world's largest recyclers of newspapers and magazines, and has more
      third-party certified sustainable forest land than any other company in the
      world. The Company'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 planned reduction of newsprint and
      commercial printing papers capacity, the closures of certain of our paper and
      sawmills, our ability to realize synergies from the combination of
      Abitibi-Consolidated Inc. and Bowater Incorporated, the anticipated timing of
      and the progress of integration efforts related to the combination, our
      ability to meet our $1 billion debt reduction target (including the success of
      our program to sell non-core assets, consolidate operations and the success of
      other actions aimed at reducing our debt), our plan to suspend our dividend
      until business conditions improve, the continued growth of our international
      newsprint position, our competitive position, our ability to maintain and
      improve customer service levels, our financial performance, and our business
      outlook, strategies and assessment of market conditions. Forward-looking
      statements may be identified by the use of forward-looking terminology such as
      the words "will", "could", "expect", "believe", "anticipate", and other terms
      with similar meaning indicating possible future events or actions or potential
      impact on the business or stockholders of AbitibiBowater.
          These forward-looking statements are not guarantees of future
      performance. They are based on management's 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, an inability to
      reduce newsprint and commercial printing capacity as quickly as anticipated,
      an inability to obtain timely contributions to our cost-reduction initiatives
      from our unionized and salaried employees, the continued strength of the
      Canadian dollar against the U.S. dollar, worsening industry conditions and
      further growth in alternative media, actions of competitors, the demand for
      higher margin coated and uncoated mechanical paper, our ability to realize
      announced price increases, and the costs of raw materials such as energy,
      chemicals and fiber. In addition, with respect to forward-looking statements
      relating to the combination of Abitibi-Consolidated and Bowater, the following
      factors, among others, could cause actual results to differ materially from
      those set forth in the forward-looking statements: the risk that the
      businesses will not be integrated successfully or that the anticipated
      improved financial performance, product quality and product development will
      not be achieved; the risk that other combinations within the industry or other
      factors may limit our ability to improve our competitive position; the risk
      that the cost savings and other expected synergies from the transaction may
      not be fully realized or may take longer to realize than expected; and
      disruption from the transaction making it more difficult to maintain
      relationships with customers, employees or suppliers. Additional factors are
      listed from time to time in AbitibiBowater's filings with the Securities and
      Exchange Commission and the Canadian securities regulatory authorities,
      including those factors contained in the company's Quarterly Report on Form
      10-Q for the quarterly period ended September 30, 2007 and the company's
      registration statement on Form S-3 filed on October 29, 2007, under the
      caption "Risk Factors." All forward-looking statements in this news release
      are expressly qualified by information contained in the company's filings with
      the Securities and Exchange Commission and the Canadian securities regulatory
      authorities. AbitibiBowater disclaims any obligation to update or revise these
      forward-looking statements.
          Any information about industry or general economic conditions contained
      in this news release is derived from third-party sources that the company
      believes are widely accepted and accurate; however, the company has not
      independently verified this information and cannot assure its accuracy.
      For further information:
      For further information: Investors: Duane Owens, (864) 282-9488; Media
      and Others: Seth Kursman, (514) 394-2398,