Laserfiche WebLink
<br />Sunday, April 26, 2001909 <br /> <br />Volume 21, Issue 16 <br /> <br />Abitibi Bowater files for bankruptcy protection from creditors <br />By Tom Klein <br /> <br />Newsprint giant Abitibi Bowater Inc. has filed for bankruptcy protection in a bid to free <br />itself from crippling debt and restructure its business. <br /> <br />Court orders for protection from creditors were granted in the United States and Canada last <br />week. While the orders provide a reprieve for Abitibi, anxiety remains high over the future <br />of the company, which operates a pulp and paper mill in Fort Frances, Ontario. Abitibi <br />Bowater owns about 43 percent of North American newsprint capacity and employs about <br />10,000 Canadians, primarily in Quebec and Ontario. <br /> <br />Company officials maintain that Abitibi Bowater can still have a bright future. <br /> <br />"The steps we are taking and the vote of confidence given to us by our restructuring <br />financial partners will enable us to protect the value of the business for our many loyal <br />employees, customers, suppliers and other stakeholders," said Abitibi CEO and President <br />David Paterson in a release. <br /> <br />Paterson had sought to refinance debt to reduce borrowing costs that reached $203 million <br />in last year's second quarter. Deadlines for interest payments were extended repeatedly in <br />recent months. <br /> <br />Fort Frances Mayor Roy Avis said he's worried about the viability of his community with <br />one of its largest employers in the midst of a major restructuring. The mill in Fort Frances <br />employs about 600 people. <br /> <br />"I do have tremendous concerns because there are so many unknowns we'll be walking <br />through," he told the Fort Frances Times. Although he's had no meetings with Abitibi <br />officials, he expressed hope that the company will work with the community "to develop a <br />path on which we can help everybody get through these difficult economic times." <br /> <br />Jim Cumming, publisher of the Fort Frances Times, said Abitibi's troubles reflect a <br />nationwide crisis in the forest industry, which has too much capacity on line for diminished <br />demand. "We're down to 30 percent of our paper usage than we were using a decade ago," <br />he said. <br /> <br />Avrin Lazar, president and chief executive officer of the Forest Products Association of <br />Canada, pins much of the blame on government inaction. "Actual regulatory change, tax <br />change that reduces the cost of doing business in Canada is rare," he told the Vancouver <br />