MONTREAL - Debt-laden newsprint and lumber producer AbitibiBowater wants to sell a permanently idled paper mill in Lufkin, Texas, the Montreal-based company says in a filing with a U.S. bankruptcy court.
The company said it will get about US$20.5 million for the land, buildings and related assets at the mill and relieve AbitibiBowater of operating expenses equivalent to about US$3 million per year, or $250,000 per month.
The court filing, dated Sept. 23, said AbitibiBowater or any buyer will face potential environmental liabilities related to the the 895.5-acre (363-hectare) property, which includes 150 acres of landfill and 100 acres of ponds and marsh.
AbitibiBowater said it has been working towards the sale of the property since 2007, long before it sought creditor protection last spring.
Under the Chapter 11 of the U.S. bankruptcy code and its Canadian equivalent, a company's management is usually required to get court approval for major transactions.
The documents filed in the U.S. Bankruptcy Court for the District of Delaware said AbitibiBowater believes the only potential buyer who can meet the needs of the company and the local government in Lufkin is a group that wants to redevelop the property.
A paper-making machine on the property would not be included in the sale. It would continue to be stored there under a leasing agreement between AbitibiBowater and the buyer.
AbitibiBowater produces newsprint, commercial printing papers, market pulp and wood products. The company owns and operates 23 pulp and paper mills and 30 wood products plants in Canada, the United States, the United Kingdom and South Korea.