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Canada In-Focus: AbitibiBowater Closes Asset Sales

June 10, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.) — AbitibiBowater (OTC: ABWTQ) said that its subsidiaries have completed the sale of three idle paper mills located in eastern Canada to a wholly owned affiliate of American Iron & Metal Company Inc. for C$8.7 million and the sale of assets located in British Columbia to an affiliate of Conifex Inc. for C$33.9 million. The eastern Canada sale included certain related assets and the property on which these paper mills are located, according to the company. The three paper mills sold to AIM are located in Beaupré, Donnacona and Dalhousie. As part of the sale, AIM has also agreed to acquire a fourth idle paper mill, located in Thunder Bay, Ontario.

In addition, AbitibiBowater said it will be paid 40% of the net proceeds from any subsequent sale of paper machines from these mills, of which AIM has undertaken to pay C$5 million on September 6, 2010, regardless of whether any such subsequent sale takes place.

The assets sold to Conifex, all located in Mackenzie, British Columbia, include a paper mill, two sawmills, including planer mills, as well as timberland operations with a forestry license providing an annual allowable cut of around 932,500 cubic meters.

Canada-based AbitibiBowater said it has streamlined its asset portfolio to focus on top-performing facilities by closing or idling 3.4 million metric tons of paper capacity, moving from an overall production capacity of 10.4 million metric tons to 7 million metric tons, since 2007. During this period, the Company has also sold aggregate assets and land for total proceeds of over $980 million.

AbitibiBowater produces a range of newsprint, commercial printing papers, market pulp and wood products. The company owns or operates 21 pulp and paper facilities and 24 wood products facilities located in the United States, Canada and South Korea.

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