On December 9, 2009, AbitibiBowater Inc. announced it had completed the sale to the Production division of Hydro-Québec of its 60 per cent indirect interest in the 335 MW McCormick hydroelectric facility for gross proceeds of $615,000,000. This transaction was of particular interest given the complex regulatory framework and significant issues that were raised.
Furthermore, shortly after the announcement of the transaction in March 2009, AbitibiBowater filed for court protection under the Companies' Creditors Arrangement Act (CCAA), which raised a number of additional legal and practical issues regarding the sale of a material asset before a successful emergence under the CCAA proceedings. The transaction also involved the sale of electrical transmission lines to Hydro-Québec TransÉnergie and the entering into of a long-term power purchase agreement with Hydro-Québec Distribution.
AbitibiBowater used the proceeds from the sale in the manner specified in the orders of the Superior Court of Québec related to the sale, including: the repayment of a US$100-million super priority senior secured debtor-in-possession (DIP) credit facility, a $200-million partial repayment under its senior secured notes, an amount of $282 million was set aside temporarily with a wholly owned subsidiary which may lend interest free, subject to certain approvals, up to $230 million to a subsidiary of AbitibiBowater and the repayment of certain transaction costs, indemnities and holdbacks as specified by the orders.
AbitibiBowater and its subsidiaries were represented internally by Jacques Vachon, Senior Vice President, Corporate Affairs and Chief Legal Officer, Stéphanie Leclaire, Vice President, Legal Affairs and Alice Minville, Legal Counsel, and assisted by McCarthy Tétrault LLP with a team led by Marc Dorion that included Philippe Fortier, Kim Thomassin, Benjamin Silver, Matthieu Rheault, Louis-Nicolas Boulanger, Laurent Gauthier and Marc-André Laflamme (corporate); Pierre Jolin (labour); Danielle Drolet and Marie-Pier Gosselin (real estate); Frédéric Harvey and Marc-André Godard (tax); Brian Pel (transfer taxes); Gregory Winfield (pension); Mary Jeanne Phelan (financial services); Cindy Vaillancourt (environmental) and Yves Comtois (competition). Stikeman Elliott LLP also represented AbitibiBowater in connection with matters relating to the CCAA proceedings and dealings with AbitibiBowater's lenders, including with respect to the new debtor-in-possession credit facility, with a team led by Marc Barbeau and Sean Dunphy that included Sophie Lamonde, Guy Martel, Howard Rosenoff, Joseph Reynaud, Gabrielle Bélanger, Marie-Aude Gagnon Rousseau and Maxime Jacquin.
The Production division of Hydro-Québec was represented in-house by a team led by Isabelle Rayle-Doiron (Chief Legal Counsel) and Lucie Lalonde (Legal Counsel) and by an Ogilvy Renault LLP team led by Gino Martel that included Niko Veilleux and Paul Beaudry (corporate/M&A); Jules Charette (tax); Miguel Manzano (real estate); Jean Piette and Anne-Frédérique Bourret (environmental law, regulatory); Martin Rochette (pension and benefit plans), Michel Carle and Pierre Pronovost (labour); Christian Roy (insolvency/restructuring); and Denis Gascon and Thierry Dorval (competition law).
Alcoa Inc. and its Canadian subsidiaries, owning a 40 per cent indirect interest in the McCormick facility, were represented by Stikeman Elliott LLP with a team that included Kevin Kyte and Sarah Kingsley (corporate) and Luc Bernier, Pierre Martel and Mathieu Halpin (tax). With respect to regulatory issues, supervising the AbitibiBowater CCAA restructuring on behalf of Alcoa and the negotiations with Hydro-Québec of various agreements, Alcoa was represented by a Borden Ladner Gervais LLP team led by Pierrette Sinclair that included Kenneth Atlas and Glen Bowman (insolvency and financial services); François Morin (pension benefits); Louis Clément and Anick Morin (corporate); Sylvie Bouvette (real estate) and Marie-Ève Léveillé (environmental law).