UPDATE, 3 p.m. Eastern, April 17:
The Quebec government offered AbitibiBowater a loan guarantee of up to $100 million (Canadian) this afternoon to try to save 7,500 Canadian jobs.
"AbitibiBowater and its employees appreciate the confidence in our restructuring initiatives and the ongoing demonstration of support and collaboration shown by Investissement Quebec and the Quebec government," president and chief executive officer David J. Paterson said in a statement today.
CORRECTION: In the original posting, AbitibiBowater was described as Canadian based. It is based in the United States, but has administrative headquarters in Montreal.
AbitibiBowater, North America’s largest newsprint maker, filed for bankruptcy protection on Thursday in a Delaware court. Through acquisitions and mergers, the company holds 45 percent of the North American newsprint market. It also holds $8.78 billion in debt.
Bankruptcy doesn't mean closing down, it means it is seeking to restructure its debt. But it would be a crippling blow to the newspaper industry if AbitibiBowater were to go under.
AbitibiBowater has been attempting to stay ahead of its debts by raising newsprint prices by closing mills and reducing production. But the fall in demand from the troubled newspaper industry has been devastating to the company.
Company spokesman Seth Kursman told Ian Austen of The New York Times that the company would make a separate request for protection under Canada’s creditor laws in Montreal today.
Kursman told the Times that the filing would have no immediate effect on the company’s 25 pulp and paper mills and 30 wood products plants. Mills operated by AbitibiBowater units in Britain and South Korea are not covered by either bankruptcy filing. But he declined comment on what restructuring measures the company would propose to the two courts.
“The paper and forest products industry is in a very turbulent period,” he said in the Times.
The Pulp and Paper Products Council reported that in February alone newsprint demand in North America fell by 33 percent compared with the same month a year earlier, a sign of decreased demand in the struggling newspaper industry.
AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth largest publicly traded pulp and paper manufacturer in the world. AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world's largest recyclers of old newspapers and magazines, and has third-party certified 100 percent of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.