AbitibiBowater Closes on C$615 Million Sale of Manicouagan Power
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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:
- Repayment of all amounts outstanding under the $100 million Super Priority Senior Secured Debtor-in-Possession (DIP) Credit Facility
- C$200 million partial repayment of amounts due under its senior secured notes
- C$282 million set aside temporarily with a wholly-owned, unlimited liability company subsidiary which may lend interest free, subject to certain approvals, up to C$230 million to the Abitibi-Consolidated subsidiary
- Repayment of certain transaction costs, indemnities, and holdbacks as specified by the orders.
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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