Government Guarantees AbitibiBowater Loans

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By: E&P Staff

The Quebec government will grant newsprint-manufacturing giant AbitibiBowater US$100 million in loan guarantees without court-imposed conditions the government had sought previously.

A judge in Quebec approved the loan yesterday, allowing the company to spend the $45 million per week it needs to continue operating as it proceeds with its bankruptcy restructuring.

The CBC reported that the government withdrew its conditions shortly before the judge ruled the funding necessary for the company’s restructuring.

AbitibiBowater, meanwhile, will again idle its Thunder Bay newsprint mill for two weeks, beginning May 16. The mill was idled for two weeks in April. On both occasions, the action was attributed to sagging demand.

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