AbitibiBowater Completes Sale of Idled Mills to AIM

AbitibiBowater announced that it has completed the sale of three idle paper mills in eastern Canada, together with certain related assets and the property on which these paper mills are located to a wholly owned affiliate of American Iron & Metal Company Inc. (AIM) for about $8.4 million. The mills are located in Beaupre, Que.; Donnacona, Que.; and Dalhousie, N.B.

As part of the sale, AIM agreed to acquire a fourth idled paper mill, located in Thunder Bay, Ontario.

In the initial announcement of the proposed sale, AIM said that its plans would be to sell off some of the equipment where possible, while processing and selling for scrap material that could not be sold as machinery.

The deal requires AIM to pay AbitibiBowater 40 percent of the net proceeds from any subsequent sale of paper machines from these mills, of which AIM has undertaken to pay around $5 million this September, whether or not the company sales the equipment.

AbitibiBowater also completed the sale of assets in British Columbia to an affiliate of Conifex Inc. for about $33 million. The assets, all located in Mackenzie, B.C., include a paper mill, two sawmills, including planer mills, as well as timberland operations with a forestry license providing an annual allowable cut of approximately 932,500 cubic meters.