AbitibiBowater Files For Bankruptcy Protection
NEW YORK (AP) ¿ Newsprint maker AbitibiBowater Inc. on Thursday filed for bankruptcy court protection after deciding there was no other way it could deal with its debt of more than $6 billion.
AbitibiBowater, created in 2007 in a combination of U.S.-based Bowater and Canada's Abitibi-Consolidated, has faced collapsing demand for its newsprint as advertisers abandon newspapers for the Internet.
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.Besides the global recession, the pulp and paper maker faced a subzero global credit environment plus the recent expropriation of a $300 million asset by a Canadian province. By last month these challenges prompted AbitibiBowater to advise, in a U.S. regulatory filing, that its "liquidity position is currently severely constrained."
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