Business News

ABITIBIBOWATER UPDATES OVERALL RESTRUCTURING PLANS

Wednesday 01. April 2009 - - Evaluating Alternative Restructuring Options with Lenders and Debt Holders; - Bowater's Previously Announced Exchange Offers Expire And Are Terminated

AbitibiBowater Inc. (“AbitibiBowater”) announced today that the Company is evaluating new restructuring alternatives and is currently in active discussions with lenders and debt holders of its Bowater Incorporated subsidiary (“Bowater”) to restructure Bowater’s debt and implement alternatives for maintaining adequate liquidity levels. These developments follow the expiration and termination of Bowater’s previously announced exchange offers.

“We are optimistic that we will be able to work constructively with all of our lenders, debt holders and other constituencies to successfully implement an alternative restructuring of our overall debt,” stated David J. Paterson, President and Chief Executive Officer.

AbitibiBowater and Bowater Finance II LLC, an indirect wholly owned subsidiary of AbitibiBowater, also announced the expiration and termination of the previously announced private exchange offers (the “Exchange Offers”) and consent solicitation (the “Consent Solicitation”) relating to the following outstanding indebtedness of Bowater and its subsidiaries: 9.00% Debentures due 2009, Floating Rate Senior Notes due 2010, 7.95% Notes due 2011, 9.50% Debentures due 2012, 6.50% Notes due 2013 and 9.375% Debentures due 2021 (collectively, the “Notes”). In addition, the concurrent private notes offering (the “Concurrent Notes Offering”) has also expired and terminated. The Exchange Offers, Consent Solicitation and Concurrent Notes Offering, which were commenced on February 9, 2009, expired at 11:59 p.m. on March 31, 2009.

Although the successful completion of the Exchange Offers was a condition to the completion of the previously announced $2.4 billion recapitalization effort being undertaken by AbitibiBowater’s Abitibi-Consolidated Inc. subsidiary (“Abitibi”) under the Canada Business Corporations Act (“CBCA”), AbitibiBowater and Abitibi currently intend to continue the Abitibi recapitalization under the CBCA process and to amend such process as necessary to take into account the developments on the Bowater refinancing. As a result, the previously announced meetings of creditors and anticipated implementation dates are expected to be postponed to later dates.

With regard to the expiration and termination of the Exchange Offers, Consent Solicitation and Concurrent Notes Offering, all previously tendered Notes will be returned, without expense, to each tendering noteholder’s account at Depository Trust Company or at such other account designated by the holder. In connection therewith, all consents previously given by holders with respect to the proposed amendments to the indentures for the Notes will be deemed withdrawn and canceled and all funds submitted in connection with the Concurrent Notes Offering will be returned without interest.