Sale to aid AbitibiBowater's debt reduction

Canadian Forest Products company AbitibiBowater has accepted a C$540m bid for its hydro-electric generating assets in Ontario.

The sale of AbitibiBowater’s 75% equity in ACH Limited Partnership to a major industrial energy producer is intended to help the company reduce its debt burden.

The proposal does not include the sale of wood product facility Iroquois Falls or the Fort Frances pulp and paper mill. “The mills remains competitive and the company continues to look for investment opportunities to ensure that they remain competitive,” it said.

Meanwhile, AbtibiBowater is locked in a serious dispute with the provincial government of Newfoundland and Labrador over its assets in the province.

The government has decided to seize the company’s hydro assets and timber cutting rights in the wake of AbitibiBowater’s move to close its paper mill in the province.

The company said it would consider all options to protect its assets.