ACI aims to chop debt

Abitibi-Consolidated Inc. (ACI) has proposed four steps in a drive to reduce debt starting in 2007 as well as provide
liquidity and improve profitability. Included are:

— An IPO of an income fund that would hold a minority interest in all of its Ontario hydroelectric assets (with about 137 MW of installed capacity). The income fund is intended to be its growth vehicle in energy generation. Subject to receipt of the necessary licenses and approvals, the offering is expected to close in 4Q06.

— Subject to the closing of the IPO, ACI intends to exercise its option to acquire the remaining 47.5% interest in Augusta Newsprint Company, Augusta, GA, which is held by Woodbridge Co. Ltd., Toronto, ON an investment holding company through which the Thomson family owns 64% of  Thomson Corp. This transaction should close during 4Q06.

— ACI will sell 55,000 acres of woodlands related to the Augusta operation.

The company also suspended the quarterly dividend. For the six months ended June 30, 2006, ACI’s net earnings were $C124 million (28 cents/share) compared with a loss of $94 million (22 cents/share) in the same period last year. www.abitibiconsolidated.com.

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