AbitibiBowater to redeem 10¼% notes with hydro asset sale proceeds

By Toni Weeks

San Diego, May 27 - AbitibiBowater, Inc. said it will use C$185 million of the C$300 million of proceeds from the sale of its 75% indirect interest in ACH LP, which constitutes the company's Ontario hydro assets, to redeem a portion of its 10¼% senior secured notes due 2018 and the remaining proceeds for general corporate purposes.

According to a press release, the purchaser of the hydro assets was 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," president and chief executive officer Richard Garneau said in the release. "We will continue to focus on reducing AbitibiBowater's debt, and this represents an important step forward in line with our commitment."

AbitibiBowater is a Montreal-based producer of newsprint, commercial printing papers, market pulp and wood products.

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