AbitibiBowater Closes on C$615 Million Sale of Manicouagan Power

AbitibiBowater, Montreal, Que., Canada, this past week closed on a series of transactions related to the sale of its 60% indirect interest in the 335 MW hydroelectric facility currently owned and operated by Manicouagan Power Co. (MPCo), to Hydro-Quebec for gross proceeds of C$615 million. AbitibiBowater says it will use proceeds from the sale in a manner specified in the orders of the Superior Court of Quebec, including:

The effect of these transactions will be to provide the Abitibi-Consolidated subsidiary with additional net liquidity of approximately C$168 million. The company has also signed a power supply agreement with Hydro-Quebec's distribution division for the supply of electricity to the company's Baie-Comeau, Que., paper mill.

"With the sale of MPCo, the company has completed a significant milestone in our overall plan to improve liquidity and financial flexibility. We are pleased to repay the US$100 million credit facility guaranteed by Investissement Quebec. Furthermore, AbitibiBowater and its employees appreciate the ongoing support and collaboration of the Quebec government," David Paterson, president and CEO, said. The additional DIP will support AbitibiBowater's business continuity while we continue to implement our restructuring program."

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