Business News
Monday 17. November 2008

ABITIBIBOWATER ANNOUNCES AMENDMENTS TO SUBSIDIARIES’ CREDIT FACILITIES

AbitibiBowater Inc. today announced that its subsidiaries Bowater Canadian Forest Products Inc. (“BCFPI”) and Bowater Incorporated (“Bowater”) as well as the other parties to Bowater’s U.S. and Canadian credit facilities, had entered into amendments to those facilities which, among other things: (1) waive the requirement that Bowater and BCFPI are required to comply immediately with the more restrictive borrowing base requirements by November 15, 2008 and providing instead for phased-in implementation through March 31, 2009 (extending to April 29, 2009 under certain circumstances) and waive compliance with certain financial covenant requirements for the third quarter of 2008; (2) amend certain covenants, including the leverage ratio, for the fourth quarter of 2008; (3) increase the interest rate under each facility by 125 basis points; (4) provide a lien on substantially all Canadian fixed assets and the shares of BCFPI’s South Korean subsidiary (which operates BCFPI’s Mokpo mill) to Canadian lenders, as security for indebtedness in a principal amount not to exceed 10% of the shareholders’ equity of BCFPI as of September 30, 2008; (5) add a provision requiring that 75% of the proceeds of asset sales by Bowater or its subsidiaries, including BCFPI, be used to reduce amounts outstanding under both facilities on a pro rata basis; (6) reduce, pro rata, the aggregate amount of the commitment under both facilities by US$10 million; and (7) require that Bowater and certain of its affiliates (including BCFPI) maintain no more than $70 million of cash on hand on a combined consolidated basis, with any excess to be used to reduce amounts outstanding under the credit facilities.
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