Abitibi-Consolidated Completes Sale of its 50% Share Ownership in PanAsia Long-term Debt to be Reduced by More Than C$1 Billion
17 Noviembre 2005 - 11:04AM
PR Newswire (US)
A (TSX) ABY (NYSE) MONTREAL, Nov. 17 /PRNewswire-FirstCall/ --
Abitibi-Consolidated Inc. announced today that it has completed the
sale of its 50% share ownership in Pan Asia Paper Company Pte Ltd.
to Norske Skog of Norway. Initially announced in September 2005,
the transaction will generate a cash consideration of US$600
million plus a cash purchase price adjustment of up to US$30
million depending on the achievement of certain financial
performance objectives in 2006. Additionally, the sale of PanAsia
has removed US$300 million of debt from the Company's balance
sheet. In total, this transaction will reduce
Abitibi-Consolidated's net debt level by more than C$1 billion,
compared to Q2 2005, significantly improving its balance sheet and
liquidity position, as well as offer financial flexibility for the
future. Divesting PanAsia also reflects a choice by the Company to
sharpen its strategic focus on its North American portfolio of
assets, where it has the most leverage to the current pricing
environment and direct access to free cash flows. "The investment
and partnership with Norske Skog was a win-win for the last 6
years. Today, we believe that full value has been realized and with
a total return on investment of 83%, we believe that this was the
right price at the right time," stated John Weaver, President and
CEO. "Divesting PanAsia is not an end in itself. Rather, it
represents the rebalancing of the portfolio of a less-levered
Company that can grow and prosper over the long haul," added
Weaver. Abitibi-Consolidated is a leading producer of newsprint and
commercial printing papers as well as a major supplier of wood
products, serving 70 countries from close to 50 operating
facilities. Committed to the sustainable forest management of more
than 40 million acres through third-party certification, the
Company is also the largest recyclers of newspapers and magazines
in North America. FORWARD-LOOKING STATEMENTS This disclosure
contains certain forward-looking statements that involve
substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond the Company's control,
including: the impact of general economic conditions in the U.S.
and Canada and in countries in which the Company and its
subsidiaries currently do business; industry conditions, the
adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced; fluctuations in the
availability or costs of raw materials or electrical power; changes
in existing forestry regulations or changes in how they are
administered which could result in the loss of certain contractual
or other rights or permits which are material to the Company's
business; increased competition; the lack of availability of
qualified personnel or management; the outcome of certain
litigation; labour unrest; and fluctuation in foreign exchange or
interest rates. The Company's actual results, performance or
achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits, including the amount of proceeds, that
the Company will derive therefrom. DATASOURCE: ABITIBI-CONSOLIDATED
INC. CONTACT: Financial Media: Seth Kursman, Vice President,
Communications and Government Affairs, (514) 394-2398, ; Investors:
Pierre Rougeau, Senior Vice-President, Corporate Development and
Chief Financial Officer, (514) 394-2264,
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