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Bankrupt AbitibiBowater Gets Loan

June 10, 2009 By: Packaging online staff Box Biz


Earlier this month, AbitibiBowater Inc. won final bankruptcy court approval of as much as $600 million in financing to help fund operations while the company reorganizes, reports Bloomberg.

The newsprint producer received approval April 17 to borrow $206 million of the $600 million loan on an interim basis. Company lawyer Kelley Cornish says the loan provides much needed capital to the Bowater group. It's needed to prevent the company's competitors from taking away business, he notes.

The Montreal, Quebec-based company and 31 units sought bankruptcy protection April 16 after U.S. lenders refused to accept a proposed debt restructuring. It lists assets of $9.9 billion and debt of $8.78 billion as of Sept. 30 in its Chapter 11 petition.

"The recent downturn in the global economy has resulted in an unprecedented decline in demand for newsprint," says William G. Harvey, chief financial officer, in court papers. AbitibiBowater has 23 pulp and paper mills and 30 wood products plants in the U.S., Canada, the U.K., and South Korea. The company was formed in Oct. 2007 with the merger of Abitibi-Consolidated Inc. and Bowater Inc. in a stock transaction valued at about $4.8 billion.

 
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