Exit plan

The way has been cleared for AbitibiBowater to climb out of Chapter 11 bankruptcy protection.

An American bankruptcy court has given the thumbs up to a restructuring plan that will allow the company to shed about $5.5 billion in unsecured debt.

Among its operations, the company runs a pulp and paper mill and sawmill operations in Thunder Bay that employs about 750 workers. The restructuring was contingent on the company getting agreements with the provinces of Ontario and Quebec that would allow it to satisfy the Canadian Companies Creditor Arrangement Act restrictions.

Among the conditions was that AbitibiBowater will meet all of its future pension obligations.

Tuesday’s deal means that AbitibiBowater will still carry about $1.5 billion in debt, but CEO David Paterson says this will result in a leaner, financially flexible and more competitive company.

The ruling will allow the company to emerge from bankruptcy protection next month.