AbitibiBowater Closes Sale of Stake in Manicouagan Power Company
Dec. 10, 2009 (Press Release) - AbitibiBowater Inc. [yesterday] announced the closing of the series of transactions resulting in the sale of its 60% indirect interest in the 335MW hydroelectric facility currently owned and operated by Manicouagan Power Company (MPCo) to Hydro-Quebec for gross proceeds of C$615 million.
The Company will use the proceeds from the sale of its interest in MPCo in the manner specified in the orders of the Superior Court of Quebec related to the sale, including:
- The repayment of all amounts outstanding under the US$100 million
Super Priority Senior Secured Debtor-In-Possession (DIP) Credit
- A C$200 million partial repayment of amounts due under its senior
- An amount of C$282 million set aside temporarily with a wholly-owned
unlimited liability Company subsidiary which may lend interest free,
subject to certain approvals, up to C$230 million to the Abitibi-
- The repayment of certain transaction costs, indemnities and holdbacks
as specified by the orders.
The effect of this series of transactions is to provide the Company's Abitibi-Consolidated subsidiary with additional net liquidity of approximately C$168 million. The Company has also signed a power supply agreement with Hydro-Quebec's distribution division for the supply of electricity to the Company's Baie-Comeau, Quebec paper mill.
"With the sale of MPCo, the Company has completed a significant milestone in our overall plan to improve liquidity and financial flexibility. We are pleased to repay the US$100 million credit facility guaranteed by Investissement Quebec. Furthermore, AbitibiBowater and its employees appreciate the ongoing support and collaboration of the Quebec government," stated David J. Paterson, President and Chief Executive Officer. "The additional DIP will support AbitibiBowater's business continuity while we continue to implement our restructuring program."