<B>Bowater Announces Acquisition of Newsprint Mill</B>

Bowater Inc. is buying the Newsprint South Inc. paper mill in Grenada, Miss., from General Electric Co.'s GE Capital Structured Finance Group for $370 million plus $8.9 million in debt.

The acquisition of the mill, along with Enron Capital acquiring Garden State Paper (see cover article), continues the rapid shift in the North American newsprint industry. Over the past several years the number of newsprint producing companies has continued to decline, as comnpanies such as Bowater and Abitibi-Consolidated continue to snap up various newsprint operations throughout the continent. The mill being acquired by Bowater, built in 1989, has an annual production capacity of about 250,000 metric tons of newsprint and has one of the lowest operating costs of a U.S. mill, the company said. Bowater said it expects the deal to close in the third quarter and for it to boost earnings and cash flow in the first year.

With the Newsprint South acquisition, the company will have nine pulp and paper mills in the United States, Canada and South Korea.