Abitibi-Consolidated creates venture in energy generation

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Abitibi-Consolidated announced today that it has entered into a binding letter of intent with the Caisse de dépôt et placement du Québec to create a joint venture for the Company’s Ontario hydroelectric generation facilities. The Company will retain a 75% interest in the joint venture, called ACH Limited Partnership, while the Caisse will acquire a 25% interest. The Caisse has also provided a commitment to ACH Limited Partnership for a 10 year unsecured term loan of $250 million, non recourse to the Company, to partially fund the acquisition of the facilities. The transaction, on a consolidated basis, is expected to yield gross proceeds of $297.5 million to Abitibi Consolidated. ACH Limited Partnership is intended to be Abitibi Consolidated’s growth vehicle in energy generation. Abitibi Consolidated’s substantial ownership interest in the joint venture reflects the ongoing strategic importance of its electricity generation assets. The Company will enter into agreements by virtue of which it will continue to operate and manage the facilities. Closing of the transaction is expected to take place in the first half of 2007 and is subject to execution of definitive agreements and certain other conditions and approvals. Scotia Capital and CIBC World Markets have advised the Company in regards to this transaction. ACH Limited Partnership encompasses eight hydroelectric facilities located in Ontario, representing an aggregate installed capacity of 136.8 MW and a normalised annual generation of approximately 828 GWh. About Abitibi Consolidated Abitibi Consolidated is a global leader in newsprint and commercial printing papers as well as a major producer of wood products, serving clients in some 70 countries from its 45 operating facilities. Abitibi Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting annually approximately 1.9 million tonnes of waste paper from landfills. It also ranks first in Canada in terms of total certified woodlands. Abitibi Consolidated shares are traded on the Toronto Stock Exchange (TSX: A) and on the New York Stock Exchange (NYSE: ABY). false false false