Business News

ABITIBIBOWATER SUPPLEMENTS ITS RECAPITALIZATION ANNOUNCEMENT

Monday 16. March 2009 - - New investor commits to backstop up to US$100 million of concurrent offering - Support of unsecured noteholders increases to approximately 39% of outstanding principal amount - Meetings of affected noteholders and lenders to be held April 30th

AbitibiBowater Inc. (“AbitibiBowater” or the “Company”) announced that, further to its previously announced recapitalization transaction (the “Recapitalization”), a new investor has agreed to provide a backstop commitment of $100 million. In consideration for this backstop commitment, the new investor will receive up to $111.1 million of AbitibiBowater’s 12.5% First Lien Notes due 2014 and up to 63.5 million Series D Warrants to purchase one share of AbitibiBowater Common Stock per warrant at $1.25 per share. The amount of the backstop commitment that is funded by the new investor will depend upon the extent to which unsecured noteholders participate in the Concurrent Offering. The backstop party will also receive a backstop commitment fee in an amount of $50 of First Lien Notes and 53.895 Series A Warrants, 53.895 Series B Warrants and 53.895 Series C Warrants for each $1,000 committed only in the event the Recapitalization is completed. The backstop commitment was made as part of and pursuant to the terms of AbitibiBowater’s previously announced Concurrent Offering made in connection with the Recapitalization. As previously announced, certain investors have provided binding commitments to subscribe for $150 million of the Concurrent Offering therefore a total of $250 million of the $350 million Concurrent Offering has been committed.

In addition, additional noteholders holding approximately $164 million in eligible unsecured notes issued by Abitibi-Consolidated and its subsidiaries, as applicable (approximately 5.6% of the total outstanding) have agreed to vote in favor of the Recapitalization, bringing the total support to approximately $1.2 billion (or 39% of the total outstanding). AbitibiBowater will continue to solicit additional support for the Recapitalization from affected noteholders and lenders.

AbitibiBowater also announced that the Commercial Division of the Superior Court of Quebec in Montreal has granted an interim court order under the Canada Business Corporations Act in connection with the Recapitalization and:


– has called the respective meetings of the affected unsecured notes,
secured notes and lenders for April 30, 2009 in Montreal; and
– has set April 1, 2009 as the record date to determine the affected
stakeholders who are entitled:
i) to receive notice of the meetings;
ii) to vote at the meetings; and
iii) to participate in the Concurrent Offering.
Holders of affected unsecured notes, secured notes and lenders who are not holders of record on April 1, 2009 will not be entitled to receive notice of or vote in the meetings or participate in the Concurrent Offering.

At the meetings, holders of the three classes of affected stakeholders listed below will be asked to vote on the Plan of Arrangement relating to the Recapitalization:

– holders of unsecured notes (listed below at outstanding amounts) which
include:

– $8M 7.875% Notes due August 1, 2009;
– $293M 15.5% Notes due July 15, 2010;
– $395M 8.55% Notes due August 1, 2010;
– $200M 7.75% Notes due June 15, 2011;
– $200M Floating Rate Notes due June 15, 2011;
– $350M 6.00% Notes due June 20, 2013;
– $450M 8.375% Notes due April 1, 2015;
– $100M 7.40% Debentures due April 1, 2018;
– $250M 7.50% Debentures due April 1, 2028;
– $250M 8.50% Debentures due August 1, 2029;
– $450M 8.85% Debentures due April 1, 2030;

– holders of the $413M 13.75% Senior Secured Notes due 2011; and
– affected lenders under the $347M Senior Term Loan due 2009.
The resolutions of affected unsecured notes, secured notes and lenders shall be considered to be approved by the affirmative vote of not less than two-thirds of the votes cast on each resolution. However, the final order from the Court to proceed with the implementation of the Plan of Arrangement may be sought whether or not the arrangement resolutions are adopted.

The interim order obtained from the Superior Court of Quebec includes a stay of proceedings in favor of Abitibi-Consolidated and certain of its affiliates. This will help provide Abitibi-Consolidated with the opportunity to present the Recapitalization to its affected creditors and for the Court to consider whether it should be approved at a hearing scheduled to be held on May 5, 2009 in Montreal.

Certain amounts of principal and interest on Abitibi-Consolidated’s affected unsecured notes, secured notes and term loan will be due before the meetings of noteholders and lenders. These amounts will not be paid as scheduled and will, if the Plan of Arrangement is approved and implemented, be addressed in accordance with the terms of the Plan of Arrangement.