Expect less than $300M, Williams tells AbitibiBowater

Newfoundland and Labrador Premier Danny Williams said Wednesday that AbitibiBowater will get less than it expects for assets the provincial government has moved to expropriate through legislation.

The pulp and paper company recently put a price tag on those assets in documents filed with the U.S. Securities and Exchange Commission, saying while it still is evaluating the full impact of the expropriation, the assets are roughly worth $300 million.

Williams said AbitibiBowater will be compensated for its physical assets, but not the timber and water rights — and the company should expect to get less than $300 million.

"It will definitely be south of that. But we've also indicated that we will compensate them for their hard assets which is, of course, the assets they have in order to produce the electricity from the water," he said.

"We'll be fair, and we'll be reasonable with them. And the legislation is very clear as to exactly where we are. But … we obviously know their starting position is $300 million so we'll work from there," he said.

Williams said with provincial budget deficits projected on the horizon, it would be in the company's interest to start negotiating soon.

The province passed legislation Dec. 16 to expropriate all AbitibiBowater assets in the province, except the mill in the central Newfoundland town of Grand Falls-Windsor.

The company plans to challenge the expropriation under the North American Free Trade Agreement.

The Grand Falls-Windsor mill produced its last roll of paper last week, putting about 450 mill workers and 250 foresters out of work. AbitibiBowater said the mill had the highest labour costs of any of its operations.