Paper company sells stake in hydro plant

MONTREAL, Quebec, Canada 9/8/09 (PennWell) — Insolvent paper company AbitibiBowater has agreed to sell its share of the Manicouagan hydropower plant to a new joint venture established by Hydro-Quebec and aluminum company Alcoa Inc.

The $615 million deal is expected to close Oct. 15. It involves AbitibiBowater’s 60 percent stake in the 335-MW plant. Alcoa holds the remaining 40 percent interest in the plant.

Also, the paper company will enter into a long-term contract for power supplies with Hydro-Quebec. AbitibiBowater owns or operates 24 pulp and paper facilities and 24 saw mills, five wood products facilities and 32 recycling facilities in the United States, Canada, the United Kingdom and South Korea. 

The paper company has $6 billion of debt and has filed for Chapter 11 bankruptcy protection. Proceeds from the sale will be used to pay down the company’s debt.

Hydro-Quebec recently began construction of the 1,550-MW Romaine hydropower complex on the North Shore of the Gulf of St. Lawrence. (HydroWorld 7/1/09)

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