THUNDER BAY – The efforts toward restructuring forest giant AbitibiBowater continued today with an announcement from the company that it has sold three idled mills and plans to sell off a fourth mill. The company announced today that its subsidiaries have completed (i) the sale of three idle paper mills located in eastern Canada together with certain related assets and the property on which these paper mills are located to a wholly owned affiliate of American Iron & Metal Company Inc. (“AIM”) for C$8.7 million and (ii) the sale of assets located in British Columbia to an affiliate of Conifex Inc. (“Conifex”) for C$33.9 million.
The three paper mills sold to AIM are located in Beaupré (Québec), Donnacona (Québec) and Dalhousie (New Brunswick). As part of the sale, AIM has also agreed to acquire a fourth idle paper mill (Fort William), located in Thunder Bay (Ontario). In addition, AbitibiBowater will be paid 40% of the net proceeds from any subsequent sale of paper machines from these mills, of which AIM has undertaken to pay C$5 million on September 6, 2010, regardless of whether any such subsequent sale takes place.
The assets sold to Conifex, all located in Mackenzie (British Columbia), include a paper mill, two sawmills, including planer mills, as well as timberland operations with a forestry license providing an annual allowable cut of approximately 932,500 cubic meters.
AbitibiBowater has streamlined its asset portfolio to focus on top-performing facilities by closing or idling 3.4 million metric tons of paper capacity, moving from an overall production capacity of 10.4 million metric tons to 7 million metric tons, since 2007. During this period, the Company has also sold aggregate assets and land for total proceeds of over $980 million.