TORONTO (Reuters) - AbitibiBowater Inc has reached a tentative labor deal affecting about 4,000 workers, bringing the newsprint maker closer to emerging from bankruptcy protection, the company and union said on Sunday.
“We’re very pleased to confirm that we’ve reached an agreement in principle,” company spokesman Jean-Philippe Cote said.
“We cannot comment on the content of this agreement, but we will definitely build on this notable achievement and pursue our negotiations with the remaining unions.”
Cote said the agreement covers about 4,000 workers and still needs to be ratified, but that agreements with its unions are an important component of its restructuring process.
AbitibiBowater, headquartered in Montreal but incorporated in the United States, filed for bankruptcy protection in April 2009 after crumpling under a heavy debt load.
The Communications, Energy and Paperworkers Union of Canada (CEP) said on Sunday that the deal was reached after the company withdrew a proposal to terminate pension plans, which would have reduced pension benefits an average of 25 percent.
“We are proud to have been able to protect retirees and to have created a new stable pension plan for the active workers. Our members will no longer have to fear the shadow of an insolvency of their plan,” CEP President Dave Coles said in the statement.
The union said the agreement covers about 4,500 workers and 8,000 retirees at 12 pulp and paper mills in eastern Canada.
Reporting by Jeffrey Hodgson, editing by Maureen Bavdek