The company needs to restructure about US$1.8-billion in Bowater Inc. debt to avoid bankruptcy protection. However, according to media reports, the company is also negotiating financing to help cover costs while under possible court supervised restructuring. The process would be potentially expensive to the company's creditors and the outcome unclear.
In addition, Steelhead Partners, LLC and Fairfax Financial Holdings Limited have offered at least $50-million in additional funding. The proposed financing depends on how negotiations go with the “lending syndidcate," according to a press release.
"We appreciate Steelhead's and Fairfax's confidence and willingness to support our restructuring initiatives. AbitibiBowater's efforts will now be directed at obtaining support from our banks to bring Steelhead and Fairfax into our lending syndicate," stated William G. Harvey, Senior Vice President and Chief Financial Officer. "We believe the additional funds proposed to be made available by Steelhead and Fairfax would provide us with sufficient short-term liquidity while we continue to address our restructuring of Bowater's debt. The approval from and support of our banks in this process is a crucial step to a successful outcome."
The company has also stated it is continuing to work towards reducing its $6-billion overall debt by nearly half. Restructuring efforts that involved five deadlines have failed in the past.
The company owns slightly more than half of Bowater Mersey Paper Company Ltd. in Brooklyn, Queens Co. The Washington Post owns the balance. The Brooklyn plant is idle until April 20.
A little bargaining chip for AbitibiBowater
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Published on
April 3, 2009
- Published on January 31, 2010
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Mark Roberts/The
AbitibiBowater Inc. has actually gained a little financial leverage to continue talking with lenders over restructuring its huge debt.
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