World's biggest newsprint co. files for bankruptcy
AbitibiBowater Inc., the world biggest newsprint producer and one of Canada's oldest companies, has filed for bankruptcy.business Updated: Apr 18, 2009 12:24 IST
AbitibiBowater Inc., the world biggest newsprint producer and one of Canada's oldest companies, has filed for bankruptcy. The newsprint giant, which has been refused a rescue package by the Canadian government, faces a debt burden of $6 billion. AbitibiBowater filed for bankruptcy protection in the US on Thursday and in Canada on Friday.
The company has about 16,000 employees, including 11,000 in Canada. It has plants in Canada, the US, Britain and South Korea and marketing operations in more than 90 countries.
Apart from being the biggest producer of newsprint and commercial printing paper, AbitibiBowater is also among the world's largest recyclers of old newspapers and magazines.
The Canadian government has refused to rescue the company as any loan guarantees for it will amount to subsidy or commercial advantage to Canadian producers which could lead to a softwood lumber dispute with US companies.
Most of Canada's forest products end up in the US market.
Canadian Revenue Minister Jean-Pierre Blackburn said Friday that the only help his government could offer to the debt-ridden giant was through the export credit agency Export Development Canada.
Industry Minister Tony Clement added: "AbitibiBowater's actions represent an internal business decision and it would be inappropriate for the government to comment further during these arrangements.''
The only meagre help for the troubled Montreal company came in the form of a loan guarantee of $100-million by the provincial Quebec government as bankruptcy proceedings began in Canada.
Along with auto and oil and mineral industries, the forest products sector is the third major pillar of the Canadian economy.