Abitibi gets extension on $1.8B debt restructuring

Struggling newsprint producer AbitibiBowater has been given two more days to come up with a restructuring plan for its debt.

In a statement Monday, AbitibiBowater said Bowater Finance II LLC has extended until late Wednesday night the expiration date for a plan to manage its debts.

AbitibiBowater, which has been closing mills and slashing production to deal with a cascade of problems, had originally had until late Friday to determine how it would handle debts totalling $1.8 billion.

The current deadline expires at 11:59 p.m. ET on Wednesday.

AbitibiBowater is headquartered in Delaware, although its corporate offices are based in Montreal.

The company's financial problems are being closely watched in central Newfoundland, where Abitibi will later this week formally shut down a century-old mill in Grand Falls-Windsor.

Junior Downey, a union official representing many of the company's former employees, said laid off workers are worried about whether they will receive severance payments.

"We're going to be in major trouble, and I'm talking about a lot of the guys down there," Downey said.

"Guys who don't have a pension, and have absolutely nothing, are depending on their severance." 

The company is also struggling in Nova Scotia, where 300 workers at the paper mill in Brooklyn, Queen's County, are facing a five-week shutdown.

A Communications, Energy and Paperworkers Union spokesperson blamed the shutdown on  poor markets and the downturn in the economy.

Bowater employs approximately 6,900 people and has 12 pulp and paper mills in the United States, Canada and South Korea.