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AbitibiBowater closes sale of its 75% interest in Ontario Hydro Assets for C$300M cash proceeds

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AbitibiBowater closes sale of its 75% interest in Ontario Hydro Assets for C$300M cash proceeds

May 27, 2011 - 09:39
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MONTREAL, May 27, 2011 (PRNewswire) -AbitibiBowater announced today the closing of the sale of its 75% indirect interest in ACH Limited Partnership ("ACH LP") to a consortium formed by a major Canadian institutional investor and a private Canadian renewable energy company.

"With the sale of our interest in ACH LP, the Company is able to pay off a considerable amount of debt and further improve our financial flexibility. We will continue to focus on reducing AbitibiBowater's debt, and this represents an important step forward in line with our commitment," stated Richard Garneau, President and Chief Executive Officer.

As previously announced, cash proceeds for AbitibiBowater's 75% indirect interest will amount to approximately C$300 million, $185 million of which the Company intends to use to redeem a portion of outstanding 10.25% senior secured notes due 2018, while the balance of proceeds will be used for general corporate purposes. As part of the transaction, ACH LP will maintain its outstanding debt with the Caisse de dépôt et placement du Québec with a face value of C$250 million.

About AbitibiBowater

AbitibiBowater is a global leader in the forest products industry, producing a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates 18 pulp and paper mills and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in close to 90 countries, AbitibiBowater is also among the largest recyclers of old newspapers and magazines in North America, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.