UPDATE 1-AbitibiBowater sets refinancing plan
(Adds details on refinancing plan; updates share movement)
NEW YORK, March 7 (Reuters) - AbitibiBowater Inc ABH.N ABH.TO, the largest North American newsprint maker, said on Friday it has developed a $1.4 billion refinancing plan to address upcoming debt maturities and general liquidity needs of its Abitibi-Consolidated subsidiary.
Last week, AbitibiBowater had cautioned that continued turmoil in the credit and capital markets, as well as the difficult industry operating environment, were challenging its ability to obtain refinancing for about $350 million in debt issues that had second quarter maturity dates.
AbitibiBowater shares, which had fallen about 50 percent over the last month due to credit-related concerns, rose 10.7 percent to $11.16 in early afternoon trade on the New York Stock Exchange.
The $1.4 billion refinancing plan proposes $200 to $300 million of new senior unsecured exchange notes, $400 million to $500 million of a new senior secured term loan, about $400 million of new senior secured notes or a term loan due 2011 and $200 million to $300 million of new equity or equity linked securities.
However, the newsprint maker again cautioned that there can be no assurance that the refinancing plan will be executed in the amounts and in the time-frame required to address Abitibi-Consolidated's needs.
If the Abitibi-Consolidated unit is unable to refinance or restructure its second-quarter debt maturities targeted by the refinancing plan on or before their maturities, the unit would be in default and may be compelled to seek bankruptcy protection, AbitibiBowater said in a statement. (Reporting by Euan Rocha; Editing by Tim Dobbyn)
