AbitibiBowater filed for bankruptcy protection, siting the weight of the two recent acquisitions and a collapsed demand from newspapers for newsprint, as primary challenges. In addition, the recession has reduced the amount companies spend on newspaper ads, and rising newsprint prices have caused newspaper publishing companies to take such cost-savings measures as trimming the width of their pages. Further, declines in advertising and circulation have resulted in fewer pages printed overall, and in dozens of newspapers one or more of their print publication days have been eliminated. The impossible credit markets also provided challenge for the company to find financing.
The company insisted operations will continue as normal during its restructuring.
No layoffs, closures or pay cuts were announced with the bankruptcy, though such moves may be forthcoming as the restructuring progresses.
AbitibiBowater also said it arranged with Fairfax Financial Holdings Ltd. and Avenue Management LLC for debtor-in-possession financing of about $200 million.
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