EX-99.1 2 dex991.htm SIXTY-SIXTH REPORT OF THE MONITOR, DATED NOVEMBER 5, 2010 Sixty-Sixth Report of the Monitor, dated November 5, 2010

 

Exhibit 99.1

 

CANADA    SUPERIOR COURT

PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL

 

No.: 500-11-036133-094

   

Commercial Division

Sitting as a court designated pursuant to

the Companies’ Creditors Arrangement Act,

R.S.C., c. C-36, as amended

 

   IN THE MATTER OF THE PLAN OF COMPROMISE OR ARRANGEMENT OF:
   ABITIBIBOWATER INC., a legal person incorporated under the laws of the State of Delaware, having its principal executive offices at 1155 Metcalfe Street, in the City and District of Montréal, Province of Quebec, H3B 5H2;
   And
   ABITIBI-CONSOLIDATED INC., a legal person incorporated under the laws of Canada, having its principal executive offices at 1155 Metcalfe Street, in the City and District of Montréal, Province of Quebec, H3B 5H2;
   And
   BOWATER CANADIAN HOLDINGS INC., a legal person incorporated under the laws of the Province of Nova Scotia, having its principal executive offices at 1155 Metcalfe Street, in the City and District of Montréal, Province of Quebec, H3B 5H2;
   And
   the other Petitioners listed on Appendices “A”, “B” and “C”;
   Petitioners
   And
   ERNST & YOUNG INC., a legal person under the laws of Canada, having a place of business at 800 René-Lévesque Blvd. West, Suite 1900, in the City and District of Montréal, Province of Quebec, H3B 1X9;
   Monitor

 

SIXTY-SIXTH REPORT OF THE MONITOR

NOVEMBER 5, 2010

INTRODUCTION

 

1. On April 17, 2009, Abitibi-Consolidated Inc. (“ACI”) and its subsidiaries listed in Appendix “A” hereto (collectively with ACI, the “ACI Petitioners”) and Bowater Canadian Holdings Incorporated (“BCHI”), its subsidiaries and affiliates listed in Appendix “B” hereto (collectively with BCHI, the “Bowater Petitioners”) (the ACI Petitioners and the Bowater Petitioners are collectively referred to herein as the “Petitioners”) filed for and obtained protection from their creditors under the Companies’ Creditors Arrangement Act (the “CCAA” and the “CCAA Proceedings”) pursuant to an Order of this Honourable Court, as amended on May 6, 2009 (the “Initial Order”). Pursuant to an Order of this Honourable Court dated November 10, 2009, Abitibi-Consolidated (U.K.) Inc., a subsidiary of ACI, was added to the list of the ACI Petitioners.

 

2. Pursuant to the Initial Order, Ernst & Young Inc. (“EYI”) was appointed as monitor of the Petitioners (the “Monitor”) under the CCAA and a stay of proceedings in favour of the Petitioners was granted until May 14, 2009 (the “Stay Period”). The Stay Period has been subsequently extended to the date of implementation of the plan of reorganization and compromise (the “Plan”) filed by the Petitioners pursuant to further Orders of this Honourable Court.

 

3. On April 16, 2009, AbitibiBowater Inc. (“ABH”), Bowater Inc. (“BI”), and certain of their direct and indirect U.S. and Canadian subsidiaries, including BCHI and Bowater Canadian Forest Products Inc. (“BCFPI”) (collectively referred to herein as “U.S. Debtors”), filed voluntary petitions (collectively, the “Chapter 11 Proceedings”) for relief under Chapter 11 of the U.S. Bankruptcy Code, 11 U.S.C. §§ 101 et seq. (the “U.S. Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “U.S. Bankruptcy Court”).

 

4.

BCHI, Bowater Canada Finance Corporation, Bowater Canadian Limited, AbitibiBowater Canada Inc., BCFPI, Bowater LaHave Corporation and Bowater Maritimes Inc. have commenced both CCAA Proceedings and Chapter 11 Proceedings

 

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and are referred to herein collectively as the “Cross-Border Petitioners” and are also included in the definition of “Petitioners”.

 

5. The Petitioners are all subsidiaries of ABH (ABH, collectively with its subsidiaries, are referred to as the “ABH Group”).

 

6. On April 17, 2009, ABH and the petitioners listed on Appendix “C” hereto (collectively with ABH, the “18.6 Petitioners”) obtained Orders under Section 18.6 of the CCAA in respect of voluntary proceedings initiated under Chapter 11 of the U.S. Bankruptcy Code and EYI was appointed as the information officer in respect of the 18.6 Petitioners.

 

7. On April 16, 2009, ACI and ACCC filed petitions for recognition under Chapter 15 of the U.S. Bankruptcy Code. On April 21, 2009, the U.S. Bankruptcy Court granted the recognition orders under Chapter 15 of the U.S. Bankruptcy Code.

 

8. On April 22, 2009, the Court amended the Initial Order to extend the stay of proceedings to the partnerships (the “Partnerships”) listed in Appendix “D” hereto.

BACKGROUND

 

9. ABH is one of the world’s largest publicly traded pulp and paper manufacturers. It produces a wide range of newsprint and commercial printing papers, market pulp and wood products. The ABH Group owns interests in or operates pulp and paper facilities, wood products facilities and recycling facilities located in Canada, the United States and South Korea. The Petitioners’ United Kingdom subsidiary, Bridgewater Paper Company Ltd. (“Bridgewater”), filed for administration, pursuant to the United Kingdom’s Insolvency Act of 1986, on February 2, 2010. The U.K. Administrator announced on May 19, 2010 that it had sold the property formerly owned by Bridgewater.

 

10.

Incorporated in Delaware and headquartered in Montreal, Quebec, ABH functions as a holding company and its business is conducted principally through four direct subsidiaries: BI, Bowater Newsprint South LLC (“Newsprint South”) (BI, Newsprint South and their respective subsidiaries are collectively referred to as the “BI Group”), ACI (ACI and its subsidiaries are collectively referred to as the “ACI Group”) and

 

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AbitibiBowater US Holding LLC (“ABUSH”) (ABUSH and its respective subsidiaries are collectively referred to as the “DCorp Group”).

 

11. ACI is a direct and indirect wholly-owned subsidiary of ABH.

 

12. ABH wholly owns BI which in turn, wholly owns BCHI which, in turn, indirectly owns BCFPI which carries on the main Canadian operations of BI.

 

13. ACCC, a wholly-owned subsidiary of ACI, and BCFPI hold the majority of ABH’s Canadian assets and operations.

PURPOSE

 

14. This is the sixty-sixth report of the Monitor (the “Sixty-Sixth Report”) in these CCAA Proceedings, the purpose of which is to report to this Honourable Court with respect to the following:

 

  (i) the Petitioners’ four-week cash flow results for the period from September 6, 2010 to October 3, 2010 (the “Reporting Period”), in accordance with the first stay extension order of this Honourable Court dated May 14, 2009 (the “First Stay Extension Order”), including the following:

 

  (a) the receipts and disbursements of the ACI Group and BCFPI for the Reporting Period including variances from the respective forecasts (the “ACI Forecast” and the “BCFPI Forecast”) as set forth in the Sixty-Third Report;

 

  (b) the current liquidity and revised cash flow forecasts of the ACI Group and BCFPI for the 13-week period ending January 2, 2011; and

 

  (ii) The settlement of claims between the Petitioners and a customer, Quebecor World Inc. (“QWI”) as further detailed in the forty-seventh report of the Monitor dated July 6, 2010 (the “Forty-Seventh Report”).

 

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TERMS OF REFERENCE

 

15. In preparing this Sixty-Sixth Report, the Monitor has been provided with and, in making comments herein, has relied upon unaudited financial information, the ABH Group’s books and records, financial information and projections prepared by the ABH Group and discussions with management of the ABH Group (the “Management”). The Monitor has not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information and, accordingly, the Monitor expresses no opinion or other form of assurance in respect of such information contained in this Sixty-Sixth Report. Some of the information referred to in this Sixty-Sixth Report consists of forecasts and projections. An examination or review of the financial forecast and projections, as outlined in the Canadian Institute of Chartered Accountants Handbook, has not been performed. Future-oriented financial information referred to in this Sixty-Sixth Report was prepared by the ABH Group based on Management’s estimates and assumptions. Readers are cautioned that, since these projections are based upon assumptions about future events and conditions the actual results will vary from the projections, even if the assumptions materialize, and the variations could be significant.

 

16. Capitalized terms not defined in this Sixty-Sixth Report are as defined in the previous reports of the Monitor and the Initial Order. All references to dollars are in U.S. currency and are translated at a rate of CDN$1.00=US$0.98 unless otherwise noted.

 

17. Copies of all of the Monitor’s Reports, in both English and French, including a copy of this Sixty-Sixth Report, and all motion records and Orders in the CCAA Proceedings will be available on the Monitor’s website at www.ey.com/ca/abitibibowater. The Monitor has also established a bilingual toll-free telephone number that is referenced on the Monitor’s website so that parties may contact the Monitor if they have questions with respect to the CCAA Proceedings.

 

18. Copies of all of the U.S. Bankruptcy Court’s orders are posted on the website for Epiq Bankruptcy Solutions LCC (“Epiq”) at http://chapter11.epiqsystems.com/abitibibowater. The Monitor has included a link to Epiq’s website on the Monitor’s website.

 

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RECEIPTS AND DISBURSEMENTS FROM SEPTEMBER 6, 2010 TO OCTOBER 3, 2010 FOR THE ACI GROUP AND BCFPI

The ACI Group

 

19. The table below summarizes the ACI Group’s (including DCorp) actual receipts and disbursements for the Reporting Period, which is detailed in Appendix “E” of this Sixty-Sixth Report, with a comparison to the ACI Forecast amounts provided in the Sixty-Third Report:

The ACI Group

 

     US$000        
     Actual     Forecast     Variance        

Opening Cash

    $ 126,078      $ 126,078      $ —          —     

Receipts

      210,031        186,477        23,554        13 % 

Disbursements

         

Net Trade Disbursements

      (130,223 )      (125,696 )      (4,527 )      (4 )% 

Intercompany

      (4,722 )      —          (4,722 )      N/A   

Other

      (78,445 )      (76,412 )      (2,033 )      (3 )% 
                          
     (213,390 )      (202,108 )      (11,282 )      (6 )% 

Financing

         

Securitization Inflows / (Outflows)

      —          (661 )      661        100 % 

Adequate Protection by DCorp to ACCC Term Lenders

      (3,180 )      (3,181 )      1        0 % 

Restructuring & Other Items

      (8,338 )      (4,650 )      (3,688 )      (79 )% 

Foreign Exchange Translation

      833        —          833        N/A   
                          
     (10,685 )      (8,492 )      (2,193 )      (26 )% 

Net Cash Flow

      (14,044 )      (24,123 )      10,079        42 % 
                                

Ending Cash

    $ 112,034      $ 101,955      $ 10,079        10 % 
                          

Immediately Available Liquidity

    $ 207,744      $ 209,719      $ (1,975 )      (1 )% 
                          

Total Available Liquidity

    $ 316,300      $ 318,275      $ (1,975 )      (1 )% 
                          

 

20. As shown in the table above, the ACI Group’s total receipts for the Reporting Period, net of joint venture remittances, were approximately $23.6 million higher than projected in the ACI Forecast (mainly due to higher than forecast sales tax receipts and sales of pulp). Disbursements were approximately $11.3 million higher than projected in the ACI Forecast (primarily due to higher than forecast trade payable and utility disbursements) and Financing net cash outflows were approximately $2.2 million higher than projected in the ACI Forecast. Overall, the ending cash balance was approximately $10.1 million higher than the ACI Forecast and Immediately Available Liquidity was approximately $2.0 million lower than the ACI Forecast.

 

21. As detailed in the twenty-ninth report of the Monitor dated December 16, 2009 (the “Twenty-Ninth Report”), the sale of the ACCC MPCo Interest closed on December 9, 2009 for gross proceeds of CDN$615 million (the “Proceeds”). Certain of the Proceeds were paid to the Monitor for distribution as follows:

 

  (i) CDN$200.0 million to the holders of the 13.75% notes (the “Senior Secured Notes”) due in 2011 (the “Senior Secured Noteholders”); and

 

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  (ii) CDN$130.0 million to the ACI Group pursuant to the ULC DIP Facility.

 

22. The Monitor continues to hold the following amounts related to the sale of the ACCC MPCo Interest pursuant to an order of this Honourable Court dated November 16, 2009:

 

  (i) CDN$50.0 million that is available as liquidity to the ACI Group subject to providing notice to certain creditors (the “ULC DIP Facility Available Upon Notice”);

 

  (ii) CDN$50.0 million that is available to the ACI Group subject to Court approval for the use of such funds (the “ULC DIP Facility Available Upon Court Approval”); and

 

  (iii) Approximately CDN$52.3 million that is not available to the ACI Group (the “Restricted ULC Reserve Deposit”).

 

23. The Monitor will continue to hold the ULC DIP Facility Available Upon Court Approval and the Restricted ULC Reserve Deposit until they are released or distributed in accordance with the Plan or until further order of this Honourable Court.

 

24. Pursuant to an order issued by the U.S. Bankruptcy Court, funds related to the sale of certain DCorp recycling assets, approximately $11.8 million, (the “Recycling Proceeds”) and funds related to the sale of DCorp’s West Tacoma mill, approximately $4.1 million, (the “West Tacoma Proceeds”) are only available to the ACI Group on ten days notice to the agent for the ACCC Term Lenders. The Recycling Proceeds and West Tacoma Proceeds are held in a designated bank account and are separate from the ACI Group’s general operating funds.

 

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25. On April 12, 2010 the Monitor received approximately $2.8 million related to the sale of ACCC’s St. Raymond sawmill (the “St. Raymond Proceeds”). The St. Raymond Proceeds are being held by the Monitor until further order of this Honourable Court.

 

26. On May 5, 2010 the Monitor received approximately $1.7 million related to the sale of ACCC’s Shawinigan, Quebec mill (the “Belgo Proceeds”). The Belgo Proceeds are being held by the Monitor until further order of this Honourable Court.

 

27. On June 4, 2010 the Monitor received approximately $29.3 million related to the sale of ACCC’s Mackenzie, British Columbia mill (the “Mackenzie Proceeds”), which are also being held by the Monitor until further order of this Honourable Court.

 

28. As shown in the table above, the ACI Group’s total receipts for the Reporting Period, net of joint venture remittances, were approximately $23.6 million higher than projected in the ACI Forecast. Disbursements were approximately $11.3 million higher than projected in the ACI Forecast and Financing net cash outflows were approximately $2.2 million higher than projected in the ACI Forecast. Overall, the ending cash balance was approximately $10.1 million higher than the ACI Forecast and Immediately Available Liquidity was approximately $2.0 million lower than the ACI Forecast.

 

29. “Immediately Available Liquidity” in the table above includes cash on hand plus liquidity available pursuant to the ULC DIP Facility Available Upon Notice and amounts available through the ACI Group’s June, 2010 securitization program. “Total Available Liquidity” includes Immediately Available Liquidity plus the ULC DIP Facility Available Upon Court Approval, the Recycling Proceeds, the St. Raymond Proceeds, proceeds related to the sale of equipment at DCorp’s Alabama River facility (the “Alabama River Equipment Proceeds”), the Belgo Proceeds, the West Tacoma Proceeds, the Mackenzie Proceeds and proceeds related to the sale of DCorp’s Lufkin mill (the “Lufkin Proceeds”).

 

30. During the Reporting Period the value of the Canadian dollar fluctuated between US$0.9542 and US$0.9799.

 

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BCFPI

 

 

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31. The following table summarizes the receipts and disbursements of BCFPI for the Reporting Period, which is detailed in Appendix “F” of this Sixty-Sixth Report:

BCFPI

     US$000        
     Actual     Forecast     Variance        

Receipts

    $ 50,716      $ 41,210      $ 9,506        23 % 

Disbursements

         

Net Trade Disbursements

      (29,759 )      (27,349 )      (2,410 )      (9 )% 

Intercompany

      (6,107 )      —          (6,107 )      N/A   

Other

      (14,770 )      (14,162 )      (608 )      (4 )% 
                          
     (50,636 )      (41,511 )      (9,125 )      (22 )% 

Financing

         

Interest

      (891 )      (884 )      (7 )      (1 )% 

Restructuring Costs

      (1,428 )      (1,276 )      (152 )      (12 )% 

Foreign Exchange Translation

      332        —          332        N/A   
                          
     (1,987 )      (2,160 )      173        8 % 

Net Cash Flows

      (1,907 )      (2,461 )      554        23 % 

Opening Cash

      12,617        12,617        —          —     
                          

Ending Cash

    $ 10,710      $ 10,156      $ 554        5 % 
                          

 

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32. As detailed in the table above, BCFPI’s total receipts for the Reporting Period were approximately $9.5 million higher than the BCFPI Forecast, primarily due to higher than forecast collections from its customers. Disbursements were approximately $9.1 million higher than the BCFPI Forecast (primarily due to increased woodland activity) and Financing cash outflows were approximately $0.2 million lower than the BCFPI Forecast. BCFPI had cash on hand of approximately $10.7 million as at October 3, 2010. Overall, the ending cash balance was approximately $0.6 million higher than the BCFPI Forecast.

CURRENT LIQUIDITY POSITION AND THE 13-WEEK CASH FLOW FORECASTS

 

33. Attached as Appendices “G” and “H”, respectively, are the updated 13-week cash flow forecasts of the ACI Group (including DCorp) and BCFPI through January 2, 2011.

 

34. As at October 3, 2010, the ACI Group had cash on hand of approximately $112.0 million, Immediately Available Liquidity of approximately $207.7 million and Total Available Liquidity of approximately $316.3 million.

 

35. The ACI Group’s actual liquidity to October 3, 2010 and forecast Immediately Available Liquidity for the 13 weeks ending January 2, 2011 is set forth in Appendix “G” and is summarized in the graph below. Forecast liquidity in the chart below assumes the exchange rate between Canadian and U.S. dollars is converted at a rate of CDN$1.00=US$0.98. Actual liquidity has been translated at a rate of either CDN$1.00=US$0.80, CDN$1.00=US$0.90, or CDN$1.00=US$0.98, depending on the period, as the rate employed by the Petitioners to convert Canadian funds to U.S. funds has been adjusted several times since the beginning of these CCAA Proceedings.

 

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LOGO

 

36. The ACI Group’s Immediately Available Liquidity at January 2, 2011, which is the end of the 13-week period in the forecast in Appendix “G”, is projected to be approximately $201.0 million. Amounts in Appendix “G” do not contemplate certain cash flows which may occur as a result of the ACI Group’s targeted emergence from these CCAA Proceedings.

 

37. The projected Immediately Available Liquidity in the graph above excludes certain items including the ULC DIP Facility Available Upon Court Approval ($49 million), the West Tacoma Proceeds (approximately $4.1 million), the Belgo Proceeds (approximately $1.7 million), the St. Raymond Proceeds (approximately $2.8 million), the Alabama River Equipment Proceeds (approximately $1.3 million), the Mackenzie Proceeds (approximately $27.7 million), the Lufkin Proceeds (approximately $10.2 million) and the Recycling Proceeds (approximately $11.8 million). Thus, the ACI Group’s Total Available Liquidity at January 2, 2011 is projected to be approximately $312.1 million.

 

38.

Actual results since the date of the issuance of the Initial Order and BCFPI’s forecast liquidity for the 13 weeks ended January 2, 2011, which includes the projected intercompany repayment to BI in the amount of $10.0 million, is set forth in Appendix “H” and is summarized in the graph below. Forecast liquidity in the chart below assumes the exchange rate between Canadian and U.S. dollars is converted at a rate of CDN$1.00=US$0.98. Actual liquidity has been translated at a rate of either CDN$1.00=US$0.80, CDN$1.00=US$0.90, or CDN$1.00=$US$0.98, depending on the

 

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period, as the rate employed by the Petitioners to convert Canadian funds to U.S. funds has been adjusted several times since the beginning of these CCAA Proceedings.

LOGO

 

39. On August 26, 2009 and September 1, 2009, this Honourable Court and the U.S. Bankruptcy Court, respectively, approved certain agreements between the ACI Group, BCFPI and Smurfit-Stone Container Canada Inc. (“Smurfit”) relating to the sale of certain timberlands by Smurfit, which will result in BCFPI receiving net proceeds in the amount of approximately CDN$28.7 million (the “Smurfit Timberland Proceeds”). The Smurfit Timberland Proceeds were paid to the Monitor’s trust account in the week ended October 25, 2009 and are to be held in trust by the Monitor pending further order of this Honourable Court. For purposes of the forecast, the proceeds are reflected as being held in trust by the Monitor and are not used for operating purposes due to the uncertainty regarding the timing of the release of these funds.

 

40. BCFPI’s liquidity as at January 2, 2011 which is the end of the 13-week period in the forecast in Appendix “H” is projected to be approximately $11.7 million, not including the Smurfit Timberland Proceeds. Amounts in Appendix “H” do not contemplate certain cash flows which may occur as a result of BCFPI’s targeted emergence from CCAA Proceedings.

 

41. Management has informed the Monitor that BCFPI’s forecast cash requirements will be supported by BI through intercompany advances, as necessary.

 

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QWI SETTLEMENT

 

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41. As previously reported to this Honourable Court in the Forty-Seventh Report, entities related to QWI filed proofs of claim against the ABH Group in the aggregate amount of approximately $9 billion (including $5 billion (CDN$6 billion) against the Petitioners); while ABH Group entities filed proofs of claim in the QWI restructuring proceedings totalling approximately $128 million.

 

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42. QWI has advised the Monitor that QWIs claims filed in the ABH Group Chapter 11 and CCAA proceedings are duplicates of each other and that the aggregate claim, after the elimination of the duplicate claims, totals approximately $25 million against all of the ABH Group entities.

 

43. As described in the Forty-Seventh Report, on June 2, 2010, QWI and ABH representatives met in Montreal to identify and resolve outstanding issues in respect of outstanding claims. At that meeting, a draft agreement (the “Draft QWI Agreement”) was reached, the key elements of which include:

 

  (i) Abitibi-Consolidated US Funding Corp., BI and Bowater Mersey Paper Company Limited (a non-filing joint venture) will share residual unsecured claims under QWI’s plan of reorganization totalling approximately $5.5 million;

 

  (ii) Abitibi-Consolidated US Funding Corp. and Bowater America Inc. will share an aggregate 503(b)(9) priority claim against QWI totalling approximately $7.7 million;

 

  (iii) all 2009 accrued and unpaid volume and incentive rebates totalling approximately $2.4 million owing by ABH entities to QWI will be paid in the ordinary course in Canada or allowed as an administrative claims in the Chapter 11 Proceedings, as applicable;

 

  (iv) all other claims filed in each of their respective restructuring proceedings by QWI and ABH will be withdrawn.

 

44. The Forty-Seventh Report also described the conditions precedent to the Draft QWI Agreement as follows:

 

  (i) approval of the Petitioners’ and QWI’s respective Court-appointed Monitors;

 

  (ii) approval of the U.S. Debtors’ Unsecured Creditor Committee (the “UCC”); and

 

  (iii) approval of this Honourable Court and the U.S. Bankruptcy Court.

 

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45. On November 2, 2010, the definitive text of the Draft QWI Agreement was finalized and the definitive agreement (the “Final QWI Agreement”) was signed by all QWI and ABH parties as well as by Export Development Corporation (“EDC”) and Compagnie française d’assurance pour le commerce extérieur – Canada branch (“COFACE”) which are credit insurers to the ABH Group and had also filed claims in the QWI proceedings.

 

46. The Final QWI Agreement no longer contains a condition that the settlement is subject to approval of this Honourable Court in the CCAA Proceedings and, accordingly, the Petitioners do not intend to seek approval of the Final QWI Agreement. However, the Final QWI Agreement, which has been approved by the Monitor and the Monitor of QWI, requires the approval of the US Bankruptcy Court in the Chapter 11 Proceedings and the approval of the U.S. Bankruptcy Court supervising the QWI Chapter 11 cases.

 

49. The Monitor notes that upon the effective date of the Final QWI Agreement, claims filed by QWI entities against the Petitioners in the CCAA Proceedings totalling in excess of $5 billion will be withdrawn.

 

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All of which is respectfully submitted.

ERNST & YOUNG INC.

in its capacity as the Court-Appointed Monitor

of the Petitioners

Per:

Alex Morrison, CA, CIRP

Senior Vice President

John Barrett, CA, CIRP

Senior Vice President

Todd Ambachtsheer, CA, CIRP

Vice President

 

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APPENDIX “A”

ABITIBI PETITIONERS

 

1. Abitibi-Consolidated Company of Canada

 

2. Abitibi-Consolidated Inc.

 

3. 3224112 Nova Scotia Limited

 

4. Marketing Donohue Inc.

 

5. Abitibi-Consolidated Canadian Office Products Holding Inc.

 

6. 3834328 Canada Inc.

 

7. 6169678 Canada Inc.

 

8. 4042140 Canada Inc.

 

9. Donohue Recycling Inc.

 

10. 1508756 Ontario Inc.

 

11. 3217925 Nova Scotia Company

 

12. La Tuque Forest Products Inc.

 

13. Abitibi-Consolidated Nova Scotia Incorporated

 

14. Saguenay Forest Products Inc.

 

15. Terra Nova Explorations Ltd.

 

16. The Jonquière Pulp Company

 

17. The International Bridge and Terminal Company

 

18. Scramble Mining Ltd.

 

19. 9150-3383 Québec Inc.

 

20. Abitibi-Consolidated (U.K.) Inc.

 

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APPENDIX “B”

BOWATER PETITIONERS

 

1. Bowater Canada Finance Corporation

 

2. Bowater Canadian Limited

 

3. Bowater Canadian Holdings. Inc.

 

4. 3231378 Nova Scotia Company

 

5. AbitibiBowater Canada Inc.

 

6. Bowater Canada Treasury Corporation

 

7. Bowater Canadian Forest Products Inc.

 

8. Bowater Shelburne Corporation

 

9. Bowater LaHave Corporation

 

10. St-Maurice River Drive Company Limited

 

11. Bowater Treated Wood Inc.

 

12. Canexel Hardboard Inc.

 

13. 9068-9050 Québec Inc.

 

14. Alliance Forest Products Inc. (2001)

 

15. Bowater Belledune Sawmill Inc.

 

16. Bowater Maritimes Inc.

 

17. Bowater Mitis Inc.

 

18. Bowater Guérette Inc.

 

19. Bowater Couturier Inc.

 

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APPENDIX “C”

18.6 PETITIONERS

 

1. AbitibiBowater US Holding 1 Corp.

 

2. AbitibiBowater Inc.

 

3. Bowater Ventures Inc.

 

4. Bowater Incorporated

 

5. Bowater Nuway Inc.

 

6. Bowater Nuway Mid-States Inc.

 

7. Catawba Property Holdings LLC

 

8. Bowater Finance Company Inc.

 

9. Bowater South American Holdings Incorporated

 

10. Bowater America Inc.

 

11. Lake Superior Forest Products Inc.

 

12. Bowater Newsprint South LLC

 

13. Bowater Newsprint South Operations LLC

 

14. Bowater Finance II, LLC

 

15. Bowater Alabama LLC

 

16. Coosa Pines Golf Club Holdings, LLC

 

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APPENDIX “D”

PARTNERSHIPS

 

1. Bowater Canada Finance Limited Partnership

 

2. Bowater Pulp and Paper Canada Holdings Limited Partnership

 

3. Abitibi-Consolidated Finance LP

 

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APPENDIX “E”

ACI GROUP ACTUAL RECEIPTS AND DISBURSEMENTS

 

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Abitibi-Consolidated Inc. and its Subsidiaries (the “ACI Group”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Actual  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      126,078        120,149        91,606        101,799        126,078   

Receipts

           

A/R Collections

      31,344        34,404        52,715        48,877        167,340   

Intercompany A/R Settlement

      7,263        3,668        11,714        1,995        24,640   

Joint Venture Remittances, Net

      —          (21,022 )      —          (2,084 )      (23,106 ) 

Collections on Behalf of Joint Ventures

      103        —          2,176        490        2,769   
        

Net A/R Collections

      38,710        17,050        66,605        49,278        171,643   

Other Inflows

      12,350        8,034        2,204        15,800        38,388   
        

Total Receipts

      51,060        25,084        68,809        65,078        210,031   

Disbursements

           

Trade Payables

      (35,081 )      (29,857 )      (32,267 )      (34,938 )      (132,143 ) 

Intercompany A/P Settlement - Receipts

      —          —          555        1,365        1,920   

Capital Expenditures

      —          —          —          —          —     
        

Net A/P Variance

      (35,081 )      (29,857 )      (31,712 )      (33,573 )      (130,223 ) 

A/R Collections - Affiliates

      3,597        3,391        3,781        5,658        16,427   

Intercompany A/R Settlements

      (9,435 )      (4,674 )      (3,860 )      (3,180 )      (21,149 ) 
        
     (5,838 )      (1,283 )      (79 )      2,478        (4,722 ) 

Marine Freight Payments

      (1,230 )      (1,896 )      (870 )      (377 )      (4,373 ) 

Utility Payments

      (6,078 )      (10,634 )      (9,457 )      (9,153 )      (35,322 ) 

Payroll & Benefits

      (7,305 )      (9,303 )      (12,407 )      (9,735 )      (38,750 ) 
        

Net Other Disbursements

      (14,613 )      (21,833 )      (22,734 )      (19,265 )      (78,445 ) 

Total Disbursements

      (55,532 )      (52,973 )      (54,525 )      (50,360 )      (213,390 ) 

Financing

           

Securitization Inflows / (Outflows)

      —          —          —          —          —     

Adequate Protection by Dcorp to ACCC Term Lenders

      —          —          —          (3,180 )      (3,180 ) 

Restructuring & Other Items

      (1,781 )      (706 )      (4,364 )      (1,487 )      (8,338 ) 

Foreign Exchange Translation

      324        52        273        184        833   
        
     (1,457 )      (654 )      (4,091 )      (4,483 )      (10,685 ) 

Cash Flow From Operations

      (5,929 )      (28,543 )      10,193        10,235        (14,044 ) 

Opening Cash Balance

      126,078        120,149        91,606        101,799        126,078   

Cash Flow From Operations

      (5,929 )      (28,543 )      10,193        10,235        (14,044 ) 
        

Ending Cash Balance

      120,149        91,606        101,799        112,034        112,034   
        

Note: The above totals are subject to rounding adjustments

 

- 24 -

Abitibi-Consolidated Inc. and its Subsidiaries (the “ACI Group”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Forecast  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      126,078        124,732        102,187        94,328        126,078   

Receipts

           

A/R Collections

      39,735        35,623        41,699        52,802        169,859   

Intercompany A/R Settlement

      —          —          —          —          —     

Joint Venture Remittances, Net

      —          (21,081 )      (3,191 )      —          (24,272 ) 

Collections on Behalf of Joint Ventures

      5,037        5,037        5,039        4,821        19,934   
        

Net A/R Collections

      44,772        19,579        43,547        57,623        165,521   

Other Inflows

      2,826        6,620        6,688        4,822        20,956   
        

Total Receipts

      47,598        26,199        50,235        62,445        186,477   

Disbursements

           

Trade Payables

      (29,901 )      (31,901 )      (30,901 )      (29,545 )      (122,248 ) 

Intercompany A/P Settlement - Receipts

      —          —          —          —          —     

Capital Expenditures

      (866 )      (866 )      (866 )      (850 )      (3,448 ) 
        

Net A/P Variance

      (30,767 )      (32,767 )      (31,767 )      (30,395 )      (125,696 ) 

A/R Collections - Affiliates

      —          —          —          —          —     

Intercompany A/R Settlements

      —          —          —          —          —     
        
     —          —          —          —          —     

Marine Freight Payments

      (1,425 )      (1,425 )      (3,225 )      (1,425 )      (7,500 ) 

Utility Payments

      (6,794 )      (6,794 )      (10,494 )      (7,480 )      (31,562 ) 

Payroll & Benefits

      (8,858 )      (6,658 )      (11,508 )      (10,326 )      (37,350 ) 
        

Net Other Disbursements

      (17,077 )      (14,877 )      (25,227 )      (19,231 )      (76,412 ) 

Total Disbursements

      (47,844 )      (47,644 )      (56,994 )      (49,626 )      (202,108 ) 

Financing

           

Securitization Inflows / (Outflows)

      —          —          —          (661 )      (661 ) 

Adequate Protection by DCorp to ACCC Term Lenders

      —          —          —          (3,181 )      (3,181 ) 

Restructuring & Other Items

      (1,100 )      (1,100 )      (1,100 )      (1,350 )      (4,650 ) 

Foreign Exchange Translation

      —          —          —          —          —     
        
     (1,100 )      (1,100 )      (1,100 )      (5,192 )      (8,492 ) 

Cash Flow From Operations

      (1,346 )      (22,545 )      (7,859 )      7,627        (24,123 ) 

Opening Cash Balance

      126,078        124,732        102,187        94,328        126,078   

Cash Flow From Operations

      (1,346 )      (22,545 )      (7,859 )      7,627        (24,123 ) 
        

Ending Cash Balance

      124,732        102,187        94,328        101,955        101,955   
        

Note: The above totals are subject to rounding adjustments

 

- 25 -

 

Abitibi-Consolidated Inc. and its Subsidiaries (the “ACI Group”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Variance  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      —          (4,583 )      (10,581 )      7,471        —     

Receipts

           

A/R Collections

      (8,391 )      (1,219 )      11,016        (3,925 )      (2,519 ) 

Intercompany A/R Settlement

      7,263        3,668        11,714        1,995        24,640   

Joint Venture Remittances, Net

      —          59        3,191        (2,084 )      1,166   

Collections on Behalf of Joint Ventures

      (4,934 )      (5,037 )      (2,863 )      (4,331 )      (17,165 ) 
                                        

Net A/R Collections

      (6,062 )      (2,529 )      23,058        (8,345 )      6,122   

Other Inflows

      9,524        1,414        (4,484 )      10,978        17,432   
                                        

Total Receipts

      3,462        (1,115 )      18,574        2,633        23,554   

Disbursements

           

Trade Payables

      (5,180 )      2,044        (1,366 )      (5,393 )      (9,895 ) 

Intercompany A/P Settlement - Receipts

      —          —          555        1,365        1,920   

Capital Expenditures

      866        866        866        850        3,448   
                                        

Net A/P Variance

      (4,314 )      2,910        55        (3,178 )      (4,527 ) 

A/R Collections - Affiliates

      3,597        3,391        3,781        5,658        16,427   

Intercompany A/R Settlements

      (9,435 )      (4,674 )      (3,860 )      (3,180 )      (21,149 ) 
                                        
     (5,838 )      (1,283 )      (79 )      2,478        (4,722 ) 

Marine Freight Payments

      195        (471 )      2,355        1,048        3,127   

Utility Payments

      716        (3,840 )      1,037        (1,673 )      (3,760 ) 

Payroll & Benefits

      1,553        (2,645 )      (899 )      591        (1,400 ) 
                                        

Net Other Disbursements

      2,464        (6,956 )      2,493        (34 )      (2,033 ) 

Total Disbursements

      (7,688 )      (5,329 )      2,469        (734 )      (11,282 ) 

Financing

           

Securitization Inflows / (Outflows)

      —          —          —          661        661   

Adequate Protection by DCorp to ACCC Term Lenders

      —          —          —          1        1   

Restructuring & Other Items

      (681 )      394        (3,264 )      (137 )      (3,688 ) 

Foreign Exchange Translation

      324        52        273        184        833   
                                        
     (357 )      446        (2,991 )      709        (2,193 ) 

Cash Flow From Operations

      (4,583 )      (5,998 )      18,052        2,608        10,079   

Opening Cash Balance

      —          (4,583 )      (10,581 )      7,471        —     

Cash Flow From Operations

      (4,583 )      (5,998 )      18,052        2,608        10,079   
                                        

Ending Cash Balance

      (4,583 )      (10,581 )      7,471        10,079        10,079   
                                        

Note: The above totals are subject to rounding adjustments

 

- 26 -

 

APPENDIX “F”

BCFPI ACTUAL RECEIPTS AND DISBURSEMENTS

 

- 27 -

 

Bowater Canadian Forest Products Inc. (“BCFPI”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Actual  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      12,617        9,924        9,465        12,794        12,617   

Receipts

           

A/R Collections

      2,393        4,599        3,330        6,197        16,519   

Intercompany A/R Settlements

      6,133        7,898        6,082        8,508        28,621   
        

Total A/R Collections

      8,526        12,497        9,412        14,705        45,140   

Advances from Bowater Inc.

      3,000        (3,000 )      6,000        (5,000 )      1,000   

Other Inflows

      789        2,305        429        1,053        4,576   
        

Total Receipts

      12,315        11,802        15,841        10,758        50,716   

Disbursements

           

Trade Payables

      (11,239 )      (7,760 )      (10,078 )      (6,737 )      (35,814 ) 

Intercompany A/P Settlements - Receipts

      —          5,488        567        —          6,055   

Capital Expenditures

      —          —          —          —          —     
        

Net A/P

      (11,239 )      (2,272 )      (9,511 )      (6,737 )      (29,759 ) 

A/R Collections - Affiliates

      983        894        1,145        2,809        5,831   

Intercompany A/R Settlements

      (568 )      (145 )      (254 )      (103 )      (1,070 ) 

Payments on Behalf of Affiliates

      (2,333 )      (5,322 )      (1,132 )      (2,081 )      (10,868 ) 
        
     (1,918 )      (4,573 )      (241 )      625        (6,107 ) 

Freight

      (1,395 )      (1,458 )      (1,125 )      (1,267 )      (5,245 ) 

Payroll and Benefits

      (650 )      (3,447 )      (1,340 )      (4,088 )      (9,525 ) 
        

Total Disbursements

      (15,202 )      (11,750 )      (12,217 )      (11,467 )      (50,636 ) 

Cash Flow From Operations

      (2,887 )      52        3,624        (709 )      80   

Financing

           

Interest

      —          —          (64 )      (827 )      (891 ) 

Restructuring Costs

      —          (526 )      (306 )      (596 )      (1,428 ) 

Foreign Exchange Translation

      194        15        75        48        332   
        

Cash Flow from Financing/Restructuring

      194        (511 )      (295 )      (1,375 )      (1,987 ) 

Net Cash Flows

      (2,693 )      (459 )      3,329        (2,084 )      (1,907 ) 

Opening Cash Balance

      12,617        9,924        9,465        12,794        12,617   

Cash Flow From Operations

      (2,693 )      (459 )      3,329        (2,084 )      (1,907 ) 
        

Ending Cash Balance

      9,924        9,465        12,794        10,710        10,710   
        

Note: The above totals are subject to rounding adjustments

 

- 28 -

 

Bowater Canadian Forest Products Inc. (“BCFPI”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Forecast  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      12,617        11,260        10,399        10,260        12,617   

Receipts

           

A/R Collections

      4,919        10,682        9,224        15,467        40,292   

Intercompany A/R Settlements

      —          —          —          —          —     
        

Total A/R Collections

      4,919        10,682        9,224        15,467        40,292   

Advances from Bowater Inc.

      3,000        (2,000 )      (3,000 )      (1,000 )      (3,000 ) 

Other Inflows

      350        2,868        350        350        3,918   
        

Total Receipts

      8,269        11,550        6,574        14,817        41,210   

Disbursements

           

Trade Payables

      (7,215 )      (7,215 )      (7,215 )      (6,843 )      (28,488 ) 

Intercompany A/P Settlements - Receipts

      —          —          3,000        —          3,000   

Capital Expenditures

      (467 )      (467 )      (467 )      (460 )      (1,861 ) 
        

Net A/P

      (7,682 )      (7,682 )      (4,682 )      (7,303 )      (27,349 ) 

A/R Collections - Affiliates

      —          —          —          —          —     

Intercompany A/R Settlements

      —          —          —          —          —     

Payments on Behalf of Affiliates

      —          —          —          —          —     
        
     —          —          —          —          —     

Freight

      (1,105 )      (1,105 )      (1,105 )      (1,090 )      (4,405 ) 

Payroll and Benefits

      (520 )      (3,305 )      (529 )      (5,403 )      (9,757 ) 
        

Total Disbursements

      (9,307 )      (12,092 )      (6,316 )      (13,796 )      (41,511 ) 

Cash Flow From Operations

      (1,038 )      (542 )      258        1,021        (301 ) 

Financing

           

Interest

      —          —          (78 )      (806 )      (884 ) 

Restructuring Costs

      (319 )      (319 )      (319 )      (319 )      (1,276 ) 

Foreign Exchange Translation

      —          —          —          —          —     
        

Cash Flow from Financing/Restructuring

      (319 )      (319 )      (397 )      (1,125 )      (2,160 ) 

Net Cash Flows

      (1,357 )      (861 )      (139 )      (104 )      (2,461 ) 

Opening Cash Balance

      12,617        11,260        10,399        10,260        12,617   

Cash Flow From Operations

      (1,357 )      (861 )      (139 )      (104 )      (2,461 ) 
        

Ending Cash Balance

      11,260        10,399        10,260        10,156        10,156   
        

Note: The above totals are subject to rounding adjustments

 

- 29 -

 

Bowater Canadian Forest Products Inc. (“BCFPI”)

Actual to Forecast Comparison

4 Weeks Ended October 3, 2010

US$000

 

     Variance  
Week Ended    12-Sep-10     19-Sep-10     26-Sep-10     3-Oct-10     Total  
        

Opening Cash

      —          (1,336 )      (934 )      2,534        —     

Receipts

           

A/R Collections

      (2,526 )      (6,083 )      (5,894 )      (9,270 )      (23,773 ) 

Intercompany A/R Settlements

      6,133        7,898        6,082        8,508        28,621   
        

Total A/R Collections

      3,607        1,815        188        (762 )      4,848   

Advances from Bowater Inc.

      —          (1,000 )      9,000        (4,000 )      4,000   

Other Inflows

      439        (563 )      79        703        658   
        

Total Receipts

      4,046        252        9,267        (4,059 )      9,506   

Disbursements

           

Trade Payables

      (4,024 )      (545 )      (2,863 )      106        (7,326 ) 

Intercompany A/P Settlements - Receipts

      —          5,488        (2,433 )      —          3,055   

Capital Expenditures

      467        467        467        460        1,861   
        

Net A/P

      (3,557 )      5,410        (4,829 )      566        (2,410 ) 

A/R Collections - Affiliates

      983        894        1,145        2,809        5,831   

Intercompany A/R Settlements

      (568 )      (145 )      (254 )      (103 )      (1,070 ) 

Payments on Behalf of Affiliates

      (2,333 )      (5,322 )      (1,132 )      (2,081 )      (10,868 ) 
        
     (1,918 )      (4,573 )      (241 )      625        (6,107 ) 

Freight

      (290 )      (353 )      (20 )      (177 )      (840 ) 

Payroll and Benefits

      (130 )      (142 )      (811 )      1,315        232   
        

Total Disbursements

      (5,895 )      342        (5,901 )      2,329        (9,125 ) 

Cash Flow From Operations

      (1,849 )      594        3,366        (1,730 )      381   

Financing

           

Interest

      —          —          14        (21 )      (7 ) 

Restructuring Costs

      319        (207 )      13        (277 )      (152 ) 

Foreign Exchange Translation

      194        15        75        48        332   
        

Cash Flow from Financing/Restructuring

      513        (192 )      102        (250 )      173   

Net Cash Flows

      (1,336 )      402        3,468        (1,980 )      554   

Opening Cash Balance

      —          (1,336 )      (934 )      2,534        —     

Cash Flow From Operations

      (1,336 )      402        3,468        (1,980 )      554   
        

Ending Cash Balance

      (1,336 )      (934 )      2,534        554        554   
        

Note: The above totals are subject to rounding adjustments

 

- 30 -

 

APPENDIX “G”

ACI GROUP CASH FLOW FORECAST

 

- 31 -

 

Abitibi Consolidated Inc. and its subsidiaries (the “ACI Group”)

Weekly Cash Flow Forecast

13 Weeks Ending January 2, 2011

US$000

 

Week ended    Notes      10-Oct-10     17-Oct-10     24-Oct-10     31-Oct-10     7-Nov-10     14-Nov-10     21-Nov-10     28-Nov-10     5-Dec-10     12-Dec-10     19-Dec-10     26-Dec-10     2-Jan-11     Total  

Opening Cash

      1         112,030        105,914        82,498        83,044        84,241        100,423        109,584        94,325        93,060        110,258        117,675        104,301        98,967        112,030   

Receipts

                                

Total A/R Collections

      3         35,524        42,659        43,042        49,662        46,831        43,792        44,167        41,967        55,117        38,978        41,456        39,155        57,209        579,559   

Collections on Behalf of Joint Ventures

      4         4,532        4,532        4,532        4,532        5,157        5,157        5,157        5,157        4,937        4,849        4,849        4,849        4,879        63,120   

Other Inflow s

      5         2,818        2,750        2,818        17,490        8,006        8,689        2,750        2,750        9,824        7,823        2,750        2,750        4,823        76,041   
           

Total Receipts

         42,874        49,941        50,392        71,684        59,994        57,639        52,074        49,875        69,878        51,650        49,055        46,754        66,911        718,720   

Disbursements

                                

Trade Payables

      6         (30,944 )      (31,944 )      (30,944 )      (34,944 )      (27,666 )      (27,666 )      (27,666 )      (27,666 )      (24,968 )      (23,889 )      (24,889 )      (24,889 )      (25,244 )      (363,319 ) 

Capital Expenditures

      7         (829 )      (829 )      (829 )      (829 )      (834 )      (834 )      (834 )      (834 )      (807 )      (796 )      (796 )      (796 )      (863 )      (10,706 ) 

Marine Freight Payments

      8         (1,425 )      (1,425 )      (1,425 )      (3,225 )      (1,425 )      (1,425 )      (1,425 )      (3,225 )      (1,425 )      (1,425 )      (1,425 )      (3,225 )      (1,425 )      (23,925 ) 

Utility Payments

      9         (5,094 )      (6,794 )      (10,410 )      (6,794 )      (6,794 )      (6,794 )      (10,633 )      (6,794 )      (6,337 )      (6,794 )      (6,794 )      (10,840 )      (8,051 )      (98,923 ) 

Payroll & Benefits

      10         (8,937 )      (10,712 )      (5,137 )      (16,860 )      (5,333 )      (10,659 )      (5,683 )      (8,333 )      (13,952 )      (10,229 )      (5,395 )      (8,045 )      (13,730 )      (123,004 ) 

Joint Venture Remittances, Net

      11         —          (20,553 )      —          (3,198 )      —          —          (19,992 )      (3,189 )      —          —          (22,030 )      (3,194 )      —          (72,156 ) 

Restructuring & Other Items

      12         (1,100 )      (1,100 )      (1,100 )      (1,350 )      (1,100 )      (1,100 )      (1,100 )      (1,100 )      (1,350 )      (1,100 )      (1,100 )      (1,100 )      (1,350 )      (15,050 ) 
           

Total Disbursements

         (48,329 )      (73,357 )      (49,845 )      (67,200 )      (43,151 )      (48,478 )      (67,332 )      (51,140 )      (48,839 )      (44,233 )      (62,428 )      (52,088 )      (50,663 )      (707,084 ) 

Financing

                                

Repayment / Interest Under Securitization Program

      13         (661 )      —          —          —          (661 )      —          —          —          (661 )      —          —          —          —          (1,983 ) 

Adequate Protection and Fees by DCorp to ACCC Term Lenders

      14         —          —          —          (3,287 )      —          —          —          —          (3,181 )      —          —          —          (3,287 )      (9,754 ) 
           

Total Financing

         (661 )      —          —          (3,287 )      (661 )      —          —          —          (3,842 )      —          —          —          (3,287 )      (11,738 ) 

Total Change in Cash

         (6,116 )      (23,416 )      546        1,197        16,182        9,160        (15,258 )      (1,265 )      17,198        7,417        (13,374 )      (5,334 )      12,961        (102 ) 
                                                                                                                           

Ending Cash Balance

         105,914        82,498        83,044        84,241        100,423        109,584        94,325        93,060        110,258        117,675        104,301        98,967        111,928        111,928   
             
                                                                                                                           
                               

Ending Cash Balance

               105,914        82,498        83,044        84,241        100,423        109,584        94,325        93,060        110,258        117,675        104,301        98,967        111,928        111,928   

ULC DIP Facility Available Upon Notice

      15         49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245        49,245   

Availability Under Securitization Program

      13         46,311        59,272        59,144        60,294        51,786        47,960        48,980        45,269        47,054        43,758        48,192        37,303        39,820        39,820   
             

Immediately Available Liquidity

         201,470        191,015        191,433        193,781        201,454        206,789        192,550        187,574        206,557        210,678        201,738        185,515        200,993        200,993   
   

ULC DIP Facility Available Upon Court Approval

      15, 20         49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265        49,265   

West Tacoma Proceeds Held in Trust

      16         4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051        4,051   

Belgo Proceeds Held in Trust

      16         1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740        1,740   

Lufkin Proceeds Held in Trust

      16         10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236        10,236   

Recycling Proceeds Held in Trust

      16         11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765        11,765   

Mackenzie Proceeds Held in Trust

      16         30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018        30,018   

St. Raymond Proceeds Held in Trust

      16         2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820        2,820   

Alabama River Equipment Proceeds Held in Trust

      16         1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250        1,250   
             

Total Available Liquidity

      15, 16         312,614        302,159        302,577        304,925        312,598        317,933        303,695        298,719        317,701        321,822        312,882        296,660        312,138        312,138   
                                                                                                                           

Securitization Schedule

      17                                  

Availability Based on Receivable Pool Balance

         166,016        178,978        178,849        180,000        171,491        167,666        168,685        164,975        166,760        163,464        167,897        157,009        159,525        159,525   

Amount Drawn Under Facility

         119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706        119,706   
             

Available Liquidity Before Interest, Fees and Repayments

         46,311        59,272        59,144        60,294        51,786        47,960        48,980        45,269        47,054        43,758        48,192        37,303        39,820        39,820   

Interest and Repayments

      18         (661 )      —          —          —          (661 )      —          —          —          (661 )      —          —          —          —          (1,983 ) 
                                                                                                                           

Restricted ULC Reserve Deposit

      19, 20         51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523        51,523   

The above forecast uses an exchange rate of CDN$1.00=US$0.98.

Note: The above totals are subject to rounding adjustments in the underlying balances.

The information and analysis in this document have not been audited or reviewed and, accordingly, no assurances are provided thereon. In addition, because forecasts are dependent upon numerous assumptions regarding future events, actual results will be different than forecast, and such differences may be material.

 

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Abitibi Consolidated Inc. and its subsidiaries (the “ACI Group”)

Notes to Weekly Cash Flow Forecast

13 Weeks Ending January 2, 2010

US $000

 

1. Opening Cash in the forecast includes cash on hand.
2. The cash flow forecast includes mills owned by the ACI Group and its subsidiaries and includes the operations of the DCorp Group. This weekly cash flow forecast may differ from the ACI Monthly Forecast as the underlying assumptions are updated weekly and will vary with the ongoing operations of the ACI Group, whereas the ACI Monthly Forecast is based on longer-term assumptions used to forecast future monthly cash flow.
3. Total A/R Collections represent amounts estimated to be collected from the ACI Group’s customers. The timing of collections is based on the ACI Group’s collection terms with its customers and the latest sales forecast.
4. Collections on Behalf of Joint Ventures represent amounts estimated to be collected by the ACI Group on behalf of its joint venture partners. The ACI Group has agreements with its joint venture partners whereby the ACI Group collects the joint venture partners’ accounts receivable (for a fee) and remits these funds to the joint venture in accordance with their agreement.
5. Other Inflows represent miscellaneous receipts including, but not limited to, such items as tax refunds, insurance proceeds or collection/management fees received from joint ventures, as estimated by the ACI Group.
6. Trade Payables represent amounts estimated to be paid to suppliers for the purchase of the ACI Group’s raw materials, repairs and maintenance and other goods and services related to production. Also included are disbursements related to selling, general and administration expenses.
7. Capital Expenditures represent amounts estimated to be paid pursuant to the ACI Group’s most recent capital expenditure budget.
8. Marine Freight Payments represent amounts estimated to be paid to the ACI Group’s outbound marine freight suppliers.
9. Utility Payments represent amounts estimated to be payable to the ACI Group’s utility suppliers.
10. Payroll and Benefits represent estimated amounts for salaries, wages, benefits and current service pension costs.
11. Joint Venture Remittances, Net represent the estimated payment of accounts receivable funds collected by the ACI Group on behalf of the respective joint venture, net of any collection/management fees.
12. Restructuring and Other Items represent amounts estimated by the ACI Group for restructuring costs and other miscellaneous payments.
13. Under the June 2010 Securitization Program, the ACI Group will not draw on the available capital unless such a draw is required for liquidity purposes. However, borrowing availability under the June 2010 Securitization Program is still immediately available as liquidity. The Repayment/Interest Under the Securitization Program represents the estimated repayment (including interest) of funds. Availability Under the Securitization Program represents the amount of immediately available liquidity under the ACI Group’s June 2010 Securitization Program.
14. Adequate Protection and fees by DCorp to ACCC Term Lenders represents an estimate of payments pursuant to the adequate protection order issued by the U.S. Bankruptcy Court.
15. Immediately Available Liquidity is calculated as cash on hand, amounts available under the June 2010 Securitization Program and a portion of the ULC DIP Facility, which is available upon notice ($49 million). Total Available Liquidity includes an additional $49 million of the Restricted ULC DIP Facility, which is subject to Court approval, as well as the Mackenzie Proceeds Held in Trust, Lufkin Proceeds Held in Trust, Recycling Proceeds Held in Trust, West Tacoma Proceeds Held in Trust, St. Raymond Proceeds Held in Trust, Belgo Proceeds Held in Trust and Alabama River Equipment Proceeds Held in Trust, available upon 10 days’ notice to the agent for the ACCC Term Lenders.
16. The net proceeds, and interest thereon, from the sale of the Mackenzie mill ($30.0 million), recycling assets ($11.8 million), St. Raymond mill ($2.8 million), Lufkin mill ($10.2 million), West Tacoma mill ($4.1 million), Belgo mill ($1.7 million) and Alabama River equipment ($1.3 million) will be held in trust or a designated account and are only available upon 10 days’ notice to the agent for the ACCC Term Lenders.
17. The Securitization Summary represents the ACI Group’s estimated calculation of amounts owing or available under the June 2010 Securitization Program based on the eligible accounts receivable (net of any fees, interest or allowances).
18. The Interest and Repayments represent interest related to the June 2010 Securitization Program, as well as repayments of funds.
19. Based on the current foreign exchange rate used in the forecast of CDN$1.00=USD$0.98, of the $276.7 million ($254.1 million at $0.90 USD FX) paid to the ULC Reserve, the Company drew $127.4 million ($117 million at $0.90 USD FX) as of the date of closing of the MPCo sale and has $49 million ($45 million at $0.90 USD FX) immediately available for liquidity purposes, with an additional $49 million ($45 million at $0.90 USD FX) availability subject to Court approval. The remaining $51 million ($47.1 million at 0.$90 USD FX) of the ULC Reserve will be held in cash, but will not be made available to the Company.
20. The Monitor will continue to hold the Restricted ULC DIP Facility ($49 million) and the Restricted ULC Reserve ($51 million) until they are released or distributed in accordance with the CCAA Plan or until further order of the Court.
21. This forecast does not reflect certain cash flows which may occur as a result of ACI Group’s targeted October 2010 emergence from CCAA proceedings.

 

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APPENDIX “H”

BCFPI CASH FLOW FORECAST

 

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Bowater Canadian Forest Products Inc.

Chapter 11/CCAA Cash Flow

13 Week Period Ending January 2, 2011

US$000s

 

Week Ended          10-Oct-10     17-Oct-10     24-Oct-10     31-Oct-10     7-Nov-10     14-Nov-10     21-Nov-10     28-Nov-10     5-Dec-10     12-Dec-10     19-Dec-10     26-Dec-10     2-Jan-11     Total  

Receipts

     Notes                                

Trade Receipts

     1, 2         6,911        12,265        10,402        9,755        8,862        10,270        9,324        11,409        12,248        9,401        9,513        10,142        11,498        132,001   

Intercompany A/P Settlements

     3         3,662        —          —          —          —          —          —          —          —          —          —          —          —          3,662   

Advances/(Repayments) from/to
Bowater Incorporated

     4         3,000        (6,000 )      (2,000 )      5,000        (10,000 )      —          —          —          —          —          —          —          —          (10,000 ) 

Other Receipts

     5         350        3,329        350        350        11,096        2,129        350        350        350        350        350        350        350        20,054   
          

Total Receipts

        13,923        9,594        8,752        15,105        9,957        12,399        9,674        11,759        12,598        9,751        9,863        10,492        11,848        145,717   

Disbursements

                               

Trade Payables

     6         (9,630 )      (6,630 )      (6,630 )      (6,630 )      (6,959 )      (6,959 )      (6,959 )      (6,959 )      (6,517 )      (6,340 )      (6,340 )      (6,340 )      (6,693 )      (89,590 ) 

Freight

     7         (1,083 )      (1,083 )      (1,083 )      (1,083 )      (1,140 )      (1,140 )      (1,140 )      (1,140 )      (1,080 )      (1,056 )      (1,056 )      (1,056 )      (1,075 )      (14,211 ) 

Payroll and Benefits

     8         (515 )      (3,505 )      (506 )      (5,242 )      (513 )      (1,958 )      (1,908 )      (1,940 )      (3,079 )      (2,036 )      (1,888 )      (2,050 )      (3,055 )      (28,197 ) 

Capital Expenditures

     9         (452 )      (452 )      (452 )      (452 )      (467 )      (467 )      (467 )      (467 )      (456 )      (452 )      (452 )      (452 )      (452 )      (5,935 ) 
          

Total Disbursements

        (11,680 )      (11,670 )      (8,671 )      (13,406 )      (9,078 )      (10,524 )      (10,474 )      (10,506 )      (11,132 )      (9,884 )      (9,735 )      (9,897 )      (11,274 )      (137,933 ) 

Net Cash Flow From Operations

        2,243        (2,076 )      81        1,699        879        1,875        (800 )      1,253        1,466        (133 )      128        595        574        7,784   

Financing and Restructuring

                               

Interest Payments and Fees

     10         —          —          (53 )      (827 )      —          —          —          (54 )      (806 )      —          —          (53 )      (827 )      (2,620 ) 

Restructuring Costs

     11         (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (319 )      (4,141 ) 
          

Cash Flow From Financing /Restructuring

        (319 )      (319 )      (371 )      (1,146 )      (319 )      (319 )      (319 )      (373 )      (1,125 )      (319 )      (319 )      (371 )      (1,146 )      (6,761 ) 

Net Cash Flow

        1,925        (2,394 )      (290 )      553        560        1,557        (1,118 )      880        341        (451 )      (191 )      224        (572 )      1,024   
          

Opening Bank Balance

        10,710        12,635        10,240        9,950        10,504        11,064        12,621        11,502        12,383        12,724        12,273        12,082        12,306        10,710   

Cash Flow

        1,925        (2,394 )      (290 )      553        560        1,557        (1,118 )      880        341        (451 )      (191 )      224        (572 )      1,024   

Closing Bank Balance

     2         12,635        10,240        9,950        10,504        11,064        12,621        11,502        12,383        12,724        12,273        12,082        12,306        11,734        11,734   
          

Settlement Proceeds Held in Trust by Monitor

     12         28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328        28,328   
          

Closing Bank Balance Including Settlement Proceeds

        40,962        38,568        38,278        38,831        39,392        40,948        39,830        40,710        41,052        40,601        40,410        40,634        40,061        40,061   
          
                              

Intercompany A/R Balance

     13                                                                                                                    

Ending Balance

              20,682        24,869        28,599        29,437        31,237        32,236        33,454        33,975        33,794        34,022        34,239        34,277        34,371        34,371   
                              

Cumulative Advances from Bowater Incorporated

                                                                                                                         

Opening Advance Balance

        10,000        13,000        7,000        5,000        10,000        —          —          —          —          —          —          —          —          10,000   

Advance / (Repayment)

     4         3,000        (6,000 )      (2,000 )      5,000        (10,000 )      —          —          —          —          —          —          —          —          (10,000 ) 
          

Closing Advance Balance

        13,000        7,000        5,000        10,000        —          —          —          —          —          —          —          —          —          —     
            
                                                                                                                          

The above forecast uses an exchange rate of CDN$1.00=US$0.98

Amounts in the above table are subject to rounding adjustments from the underlying balances

The information and analysis in this document have not been audited or reviewed and, accordingly, no assurances are provided thereon. In addition, because forecasts are dependent upon numerous assumptions regarding future events, actual results will be different than forecast, and such difference may be material.

 

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Bowater Canadian Forest Products Inc. (“BCFPI”)

Notes to CCAA Cash Flow

13 Week Period Ending January 2, 2011

US$000s

 

1. Trade Receipts are based on BCFPI’s estimate of collection terms and BCFPI’s latest sales forecast.
2. The cash flows included in the forecast include only those BCFPI mills in Canada. No funding or dividends from foreign subsidiaries are included in the forecast.
3. Intercompany A/P Settlements represents the reimbursement of funds disbursed on behalf of Bowater Mersey Paper Company Limited.
4. Advances/(Repayments) from Bowater Incorporated represents amounts received pursuant to the BI/BCFPI DIP Facility to maintain sufficient liquidity.
5. Other Receipts include the sale of woodchips, sundry mill level deposits, sales tax refunds and road tax refunds.
6. Trade Payables represent payments for raw materials, repairs and maintenance, utilities, insurance and other costs.
7. Freight represents disbursements in respect of costs to deliver product to customers.
8. Payroll and Benefits represent amounts paid to employees for salaries and wages (including the related withholdings), pension payments and other benefits due under employee benefit programs. The forecast assumes that only those pension payments in respect of current service costs will be paid.
9. Capital Expenditures are costs scheduled to be made in accordance with agreements with BCFPI’s various capital equipment suppliers and reflect requirements pursuant to BCFPI’s most recent capital expenditure budget.
10. Interest Payments and Fees represents interest costs and renewal fees for the company’s senior secured revolving facility, the existing secured term loan and the BI/BCFPI DIP Facility. Interest on Advances from Bowater Inc. are accrued at the 1 month LIBOR rate plus 2%.
11. Restructuring Costs represent costs related to the restructuring including transaction fees related to the DIP facility.
12. Settlement Proceeds Held in Trust represent funds received by BCFPI pursuant to an agreement it had with Smurfit-Stone Container Canada Inc. The amount held in trust by the Monitor does not form part of the Closing Bank Balance.
13. The Intercompany A/R Balance represents pre-filing and post-filing sales to paper customers in the United States by BCFPI through Bowater America Inc. This amount is assumed not to be stayed and is collected by BCFPI from Bowater America Inc. in the normal course. This balance represents trade A/R only and does not represent any amounts funded from BI to BCFPI pursuant to the BI/BCFPI DIP Facility.
14. This forecast does not reflect certain cash flows which may occur as a result of BCFPI’s targeted October 2010 emergence from CCAA and Chapter 11 proceedings.

 

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