By: E&P Staff
Montreal-based newsprint-manufacturing giant AbitibiBowater Inc., was granted bankruptcy court approval of its proposed outline for restructuring, which may now be voted on.
Finding that adequate information had been disclosed, the Wilmington, Del., court has allowed the plan to be forwarded to creditors despite objections, according to Bloomberg reported on Aug. 1 and 2.
Under the restructuring plan, unsecured creditors would share the reorganized company’s stock and the right to participate in a $500 million notes offering, with notes convertible into equity in the reorganized company.
The company would pay secured creditors in full in cash, or reach agreement on another form of full recovery, according to the disclosure statement. Existing shareholders would be wiped out under the proposal, according to Bloomberg.
AbitibiBowater petitioned for Chapter 11 protection in April of 2009, after U.S. lenders rejected its proposed debt restructuring. it expects to emerge from bankrupcty later this year.