Lenders have given AbitbiBowater Inc. another two days (midnight March 27) to negotiate a deal to restructure US$1.8-billion in debt at its American subsidiary Bowater Inc.
The deal has been held up by three American banks, which are holding out, according to business pundits, for better terms.
AbitibiBowater officials stated shortly before a March 20 deadline that extending deadlines is common. This is the third deadline. It also demonstrates negotiations are continuing. If a deal isn’t reached, the company will most-likely be forced to file for bankruptcy protection and future efforts to reduce its overall $6-billion debt load by over one-third would be placed in jeopardy.
The company could also face delisting on the stock exchanges in Toronto and New York.
Two shareholders, Fairfax Financial Holdings Ltd. and Steelhead Partners LLC have agreed to Abitibi’s plans based on cuts that have already been made at the company. It has been reported in the media many business pundits believe the company would do well, even in the current economic climate, if the debt burden were greatly reduced.
AbitibiBowater has closed mills, laid off workers, and regularly shuts down mills, including, currently, its Bowater Mersey Paper Company Ltd. mill in Brooklyn, Queens Co.
Efforts are being made to reach the two union local presidents involved with the Brooklyn plant.
Another AbitibiBowater deadline
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Published on
March 26, 2009
- Published on January 31, 2010
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Mark Roberts/The
Deadlines are seemingly only important to newspapers, not newsprint makers and financiers.
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