AbitiBowater has filed for creditor protection under Chapter 11 of the American bankruptcy code. Trade has taken a hit as demand for paper products around the world has dropped.
A statement put out by the firm explained that it plans to use relief under Chapter 11 to “deal decisively with its debt burden for the benefit of all stakeholders”.
A spokesman said that this decision will have no impact on UK operations: “We will continue to operate our UK operations as normal.”
Bankruptcy protection laws in both Canada and the US are designed to allow firms to continue to operate while negotiating with their creditors under court supervision.
As a result of its challenges, AbitbiBowater has been delisted by the New York Stock Exchange.
Board of directors chairman Dick Evans said: “Over many months, we undertook an exhaustive examination of the company’s recapitalisation options. The board and management believe the actions initiated will allow the company to make the necessary changes to ensure the long-term viability of the company within a process that ensures fair and equitable treatment for all stakeholders, while allowing it to continue to meet the needs of its customers.