AbitibiBowater Seeks Reorganization
MONTREAL—Saddled with more than $6 billion in debt and facing drastically shrinking demand for its newsprint, paper producer AbitibiBowater has filed for Chapter 11 bankruptcy protection both in the United States and in Canada. The company was forced to terminate a $1.8 billion debt exchange offer for its Bowater subsidiary in April when lenders would not provide sufficient support. It had also been trying to restructure $2.4 billion in debt from its Abitibi-Consolidated unit.
Investissement Quebec announced plans to guarantee a maximum amount of $100 million of supplemental funding to AbitibiBowater. The proposed financing and guarantee are still subject to the approval of the courts in Canada.