Montreal, Quebec-based Abitibi- Consolidated Inc. (ACI) has sold its 50% share in Singapore-based Pan Asia Paper Company Pte Ltd. to partner Norske Skog of Norway for US$600 million cash plus a cash purchase price adjustment of up to US$30 million depending on the achievement of certain financial performance objectives in 2006.

The price represents a total enterprise value of about US$1.85 billion for PanAsia given its current debt level and the presence of minority partners in three of its mills. ACI said the deal will reduce its net debt level by over $C1 billion.

ACI initially invested US$200 million in 1999 during the creation of the original three-way PanAsia partnership. When South Korean partner Hansol left in 2001, ACI invested another US$175 million. The US$300 million pro rata share of debt will be accounted for by Norske Skog.

Before this transaction, ACI was the largest newsprint producer in the world. Its share of PanAsia’s 2005 newsprint capacity is 705,000 tonnes (t). Combined with the 350,000 t of permanent capacity closures announced in Q205 and slated for Q405, the adjusted newsprint capacity will be about 4 Mt.

www.abitibiconsolidated.com.