Implications of Abitibi selling off hydro assets

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Implications of Abitibi selling off hydro assets

A couple months back Newfoundland seized all of Abitibi's timber and hydro assets that went with the pulp mill it had closed.

Abitibi has clearly learned its lesson: sell the hydro assets BEFORE you close the plant it supplies. 

Here is what Abitibi is doing in Ontario.

Abitibi to sell hydro assets to Brookfield

This is some rearrangement of comments I already made when I posted this in the Atlantic regional forum.

This is a warning to Nova Scotia. I think I suggested earlier that Bowater may sell off the hydro assets to perempt seizure. The plant there is definitely hanging by a thread.

Shopping around such assets does not happen overnight or quietly. The NL situation is different since the plant is already closed. But its quite likely Willimas action was precipitated by wanting to preempt the thief from getting away with the goods quietly.

Do you think the NS government is doing anything? Highly unlikely. And if anyone were to ask them they'd say they were talking.

"Nice thief. You wouldn't want...."

And of course, there is the Ontario government, and resource ownership and politics in general.

It would be too late for the Ontario government to do anything now. They would be sued and lose the suit if they tried to do anything about the hydro assets after the fact.

But presumably Abitibi has timber rights with the Ontario plants, as they do in Nova Scotia, and did in Newfoundland before they were taken back.

Can't just wallop out the big stick like Newfoundland did before a plant is closed. But there has to be some leverage here. Possibly including making it difficult/impossible for them to sell off the hydro or timber assets.

George Victor

Is Abitibi listed on both the TSX and New York exchanges?

Or just NY?

Who knows whose funds are being salvaged in this fashion?


Its worth noting that the article gives the reason for the sale as Abitibi needing to make a debt payment.

Maybe. They had options on that one.

But they were not going to say if the main reason for selling the hydro assets was that if they waited until after closing the mill they risked having Ontario give them the same treatment as did Newfoundland.

Lard Tunderin Jeezus Lard Tunderin Jeezus's picture

It doesn't really matter, does it?

Dalton McGuinty is a chickenshit. There's not hope in hell that he'd stand up on his hind legs before corporate interests on behalf of Ontario's citizens, voters and taxpayers.