UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 29, 2007
ABITIBIBOWATER INC.
(Exact name of Registrant as Specified in Charter)
Delaware 001-33776 98-0526415
(State or other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification Number)
AbitibiBowater Inc.
1155 Metcalfe Street, Suite 800
Montreal, Quebec
Canada H3B 5H2
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (514) 875-2160
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
| | Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
| | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
| | Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
| | Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.05. Costs Associated with Exit or Disposal Activities
On November 29, 2007, our Board of Directors approved an action plan to
reduce our newsprint and commercial printing papers production capacity by
almost 1 million metric tons per year by the end of the first quarter of 2008.
The reductions include the permanent closure of the Belgo (Shawinigan, Quebec)
and Dalhousie (New Brunswick) mills, as well as the indefinite idling of the
Donnacona (Quebec) and Mackenzie (British Columbia) mills. We will also
indefinitely idle two Mackenzie sawmills directly supporting the Mackenzie paper
operation. These facilities are not generating positive cash flows and represent
approximately 600,000 metric tons of newsprint, 400,000 metric tons of
commercial printing papers, and 500 million board feet of lumber capacities.
Additionally, we will permanently close previously idled paper mills at Fort
William (Thunder Bay, Ontario) and Lufkin (Texas), as well as the #3 Paper
Machine at the Gatineau (Quebec) facility. The previously idled operations had a
total capacity of approximately 650,000 metric tons.
We estimate that we will incur cash closure costs of approximately $100
million related to severance and other closure charges as a result of these
actions. Approximately $30 million of these closure costs will not impact our
earnings and will be recorded as liabilities in the purchase price allocation of
our subsidiary, Abitibi-Consolidated Inc., as they relate to facilities owned by
Abitibi-Consolidated. In addition, we estimate we will incur an after-tax asset
impairment charge of approximately $110-$130 million in the fourth quarter
related to assets of our Bowater Incorporated subsidiary. An additional
estimated $230-$270 million after-tax impairment charge related to assets owned
by Abitibi-Consolidated is not expected to impact consolidated fourth quarter
earnings as it will be eliminated by the fair value adjustments recorded in the
purchase price allocation.
Statements in this current report that are not reported financial results
or other historical information are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. They include,
for example, statements about our planned reduction of newsprint and commercial
printing papers production capacity, the closure or idling of certain of our
paper and sawmills and the costs that actually will be incurred as a result of
these actions. Forward-looking statements may be identified by the use of
forward-looking terminology such as the words "will", "could", "expect",
"believe", "anticipate", and other terms with similar meaning indicating
possible future events or actions or potential impact on our business or
stockholders of AbitibiBowater. These forward-looking statements are not
guarantees of future performance. They are based on management's assumptions,
beliefs and expectations, all of which involve a number of business risks and
uncertainties that could cause actual results to differ materially. These risks
and uncertainties include, but are not limited to, an inability to reduce
newsprint and commercial printing capacity as quickly as anticipated, the
continued strength of the Canadian dollar against the U.S. dollar, worsening
industry conditions, and the costs of labor and of raw materials such as energy,
chemicals and fiber. Additional factors are listed from time to time in
AbitibiBowater's filings with the Securities and Exchange Commission and the
Canadian securities regulatory authorities, including those factors contained in
our Quarterly Report on Form 10-Q for the quarterly period ended September 30,
2007 and our registration statement on Form S-3 filed on October 29, 2007, under
the caption "Risk Factors." All forward-looking statements in this news release
are expressly qualified by information contained in our filings with the
Securities and Exchange Commission and the Canadian securities regulatory
authorities. AbitibiBowater disclaims any obligation to update or revise these
forward-looking statements.
Item 2.06. Material Impairments
The information contained in Item 2.05 relating to asset impairment charges
is incorporated into this Item 2.06 by reference.
Item 7.01. Regulation FD Disclosure.
On November 29, 2007, we issued a news release announcing several action
plans, including an action plan to reduce our output of newsprint and commercial
printing paper. The news release is attached as Exhibit 99.1 and incorporated by
reference.
Item 8.01. Other Events
On November 29, 2007, the Board of Directors decided to suspend the payment
of dividends to shareholders.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
99.1 News Release, dated November 29, 2007
Signature
Pursuant to the requirements of the Securities Exchange Act of l934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ABITIBIBOWATER INC.
Date: December 5, 2007 By: /s/ Jacques P. Vachon
-----------------------------------
Name: Jacques P. Vachon
Title: Senior Vice President,
Corporate Affairs, Chief
Legal Officer and Secretary