MONTREAL - Insolvent newsprint giant AbitibiBowater is unloading more assets as it seeks a Quebec court’s permission to sell its largely idled Mackenzie, B.C., wood and paper mills to a subsidiary of privately-held Conifex Inc. for an undisclosed price.
DTR Wood Acquisition Co. was the successful bidder for the two sawmills, two planer mills and a newsprint mill.
DTR initially didn’t want the newsprint assets and paper machines at all. But most were added to the deal because of complications in carving them out from the site, said a motion before Quebec’s Superior Court.
The purchaser then increased its offer for the assets, owned by AbitibiBowater subsidiary Abitibi Consolidated.
Officials of Fort St. James, B.C,-based Conifex couldn’t be reached for comment. Abitibi said it couldn’t comment because the matter was before the courts.
The deal is expected to close around April 30.
AbitibiBowater is also looking to sell three closed mills in Quebec. The mills in Roberval, Saint-Fulgence and Lebel-sur-Quevillon have been closed since last year.
The deal also includes several buildings, timber concessions, licences, lands, a steam power plant, raw materials including logs, lumber and four homes.
Abitibi Consolidated decided to sell the Mackenzie assets late in 2008 as part of its reorganization efforts.
Twelve potential purchasers were approached after the facilities were formally put on the market last May.
Four groups submitted non-binding offers in July covering different parts of the assets. The two highest bidders withdrew or had difficulty securing financing.
Conifex then submitted an offer in December and requested exclusivity.
In August of 2008, Conifex purchased idled sawmill and forestry assets owned by Pope & Talbot and by Canfor Corporation. The mill had been idled in September 2007 and Conifex resumed operations on a one-shift basis in March 2009.
North America’s largest newsprint producer filed for court protection from creditors last April in Canada and the United States.
In addition to its large debt, the company has faced a collapse in newsprint demand caused by dwindling advertising and a structural shift to electronic media.
AbitibiBowater recently reached tentative agreements with its largest unions that pave the way for it to exit bankruptcy protection by this fall. The deals include historic wage concessions to preserve the pension plan of thousands of workers and retirees.
Formed by the 2007 merger of Canadian and U.S. newsprint companies, AbitibiBowater produces newsprint, commercial printing papers, market pulp and wood products.
It operates 23 pulp and paper mills and 30 wood products operations in the United States, Canada, the United Kingdom and South Korea.
