| WILMINGTON, Del., April 17
WILMINGTON, Del., April 17 North America's
largest newsprint maker, AbitibiBowater ABWTQ.PK, won
bankruptcy court approval on Friday for $206 million in
financing to get it through its Chapter 11 reorganization.
The judge's interim order approving the financing, known as
debtor-in-possession or DIP funding, clears the way for the
company to use the funds provided by Fairfax Financial Holdings
Ltd (FFH.TO) of Canada and Avenue Investments LP for its
Fairfax Financial Holdings invested $350 million in
AbitibiBowater last year through senior unsecured convertible
notes issued by AbitibiBowater. Fairfax holds two
AbitibiBowater board seats.
The DIP financing can be eventually be increased to $600
million upon the final order from the judge.
AbitibiBowater attorneys said in the court they had
competing proposals for their DIP financing, but the Fairfax
Financial Holding plan was less expensive and provided the
company greater flexibility.
AbitibiBowater, which employs more than 15,000, filed on
Thursday. The company was formed in the 2007 merger of Bowater
of the United States and Abitibi Consolidated of Canada. It has
struggled with declining demand from newspapers, many of which
have cut back on the amount of paper-based publishing.
(Reporting by Thomas Hals; Editing by Richard Chang)