<SUBMISSION>
<ACCESSION-NUMBER>0001193125-09-055354
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20090316
<ITEMS>7.01
<ITEMS>9.01
<FILING-DATE>20090316
<DATE-OF-FILING-DATE-CHANGE>20090316
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BOWATER INC
<CIK>0000743368
<ASSIGNED-SIC>2621
<IRS-NUMBER>620721803
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-08712
<FILM-NUMBER>09684251
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>55 EAST CAMPERDOWN WAY
<STREET2>P O BOX 1028
<CITY>GREENVILLE
<STATE>SC
<ZIP>29601
<PHONE>8642717733
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>55 EAST CAMPERDOWN WAY
<STREET2>P O BOX 1028
<CITY>GREENVILLE
<STATE>SC
<ZIP>29602
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
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 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P
STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:3px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P
STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>FORM 8-K </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>Pursuant to Section&nbsp;13 or 15(d) of the Securities
Exchange Act of 1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Date of Report (Date of earliest event reported): March&nbsp;16, 2009 </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="6"><B>BOWATER INCORPORATED </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Exact name of Registrant as Specified in Charter) </B>
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>1-8712</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>62-0721803</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(State or other Jurisdiction of</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>Incorporation or Organization)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Commission File Number) </B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(I.R.S. Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>Identification Number)</B></FONT></P></TD></TR>
</TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Bowater Incorporated</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>55 East Camperdown Way</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>P.O. Box 1028</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Greenville, South Carolina</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>29602</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Address of principal executive offices)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Zip Code)</B></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Registrant&#146;s telephone number, including area code: (864)&nbsp;271-7733 </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><FONT FACE="WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P
STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

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<TR>
<TD WIDTH="8%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;7.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Regulation FD Disclosure. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As previously reported,
on February&nbsp;9, 2009, Bowater Finance&nbsp;II&nbsp;LLC (&#147;BowFin&#148;), an indirect wholly owned subsidiary of AbitibiBowater&nbsp;Inc. (&#147;AbitibiBowater&#148;), commenced (i)&nbsp;private exchange offers (the &#147;Exchange
Offers&#148;) with respect to six series of outstanding debt securities (the &#147;Bowater Notes&#148;) issued by either Bowater Incorporated (the &#147;Company&#148;), a wholly owned subsidiary of AbitibiBowater, or Bowater Canada Finance
Corporation, a wholly owned subsidiary of the Company, (ii)&nbsp;a consent solicitation to effect certain amendments to the indentures governing the Bowater Notes, and (iii)&nbsp;a concurrent private offering of new 15.5% First Lien Notes due
November&nbsp;15, 2011 to holders of Bowater Notes who tender notes in the Exchange Offers (the &#147;Concurrent Notes Offering&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The Exchange Offers, consent solicitation and Concurrent Notes Offering are all being made pursuant to a confidential offering circular dated February&nbsp;9, 2009 (the &#147;Offering Circular&#148;). On March&nbsp;16, 2009, BowFin issued a
supplement to the Offering Circular (the &#147;Supplement&#148;), which was distributed solely to eligible holders of Bowater Notes. The Supplement contains certain information regarding AbitibiBowater and the Company that has not been previously
disclosed, including certain &#147;Recent Developments&#148; and updated risk factors. The &#147;Recent Developments&#148; and updated risk factors are furnished as Exhibit 99.1 to this report. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The information contained in this Current Report on Form&nbsp;8-K, including Exhibit&nbsp;99.1, is furnished pursuant to Item&nbsp;7.01 of Form&nbsp;8-K
and shall not be deemed to be &#147;filed&#148; for the purposes of Section&nbsp;18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this report shall not be incorporated
by reference into any registration statement or any other document filed pursuant to the Securities Act, except as otherwise expressly stated in such filing. By filing this report and furnishing the information contained herein, including the
exhibit hereto, the Company makes no admission as to the materiality of any such information. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Forward-Looking Statements </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Statements in this report, including the exhibit hereto, that are not reported financial results or other historical information are &#147;forward-looking
statements&#148; within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to the Exchange Offers, consent solicitation and Concurrent Notes Offering and other refinancing activities,
certain financial and operating information regarding AbitibiBowater and the Company and our business outlook generally. Forward-looking statements may be identified by the use of forward-looking terminology such as the words &#147;will,&#148;
&#147;could,&#148; &#147;may,&#148; &#147;intend,&#148; &#147;expect,&#148; &#147;believe,&#148; &#147;anticipate,&#148; and other terms with similar meaning indicating possible future events or potential impact on the business or securityholders of
the Company and AbitibiBowater. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The reader is cautioned not to place undue reliance on these forward-looking statements, which are not
guarantees of future performance. These statements are based on management&#146;s current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially.
These risks and uncertainties include, but are not limited to, our substantial indebtedness and our ability to refinance our existing indebtedness or obtain financing or otherwise derive additional liquidity, especially in light of the current
decline in the global economy and the credit crisis. We undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise. </FONT></P> <P
STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="8%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;9.01</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Financial Statements and Exhibits. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) Exhibits
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">99.1 Recent Developments and Updated Risk Factors </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">BOWATER INCORPORATED</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Jacques P. Vachon</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Jacques P. Vachon</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Vice President and Secretary</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Dated: March&nbsp;16, 2009 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;
</FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT INDEX </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="95%"></TD></TR>
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<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">99.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Recent Developments and Updated Risk Factors</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>


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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>dex991.htm
<DESCRIPTION>RECENT DEVELOPMENTS AND UPDATED RISK FACTORS
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 99.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>RECENT DEVELOPMENTS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Liquidity </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Subsequent to the commencement of the exchange offers on February&nbsp;9, 2009, Bowater continued to experience a deterioration in business conditions, in particular, significant price and volume pressures during
January and February 2009, resulting in operating performance for those months below earlier internal forecasts. In addition, the marked deterioration in business conditions globally has made it very difficult to forecast future short-term results
for Bowater with confidence. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The deterioration in business conditions has caused Bowater&#146;s management to conclude that, although it
currently anticipates slightly positive cash flow through the end of 2009, even if the Concurrent Notes Offering, the Additional Financing Transaction and the amendments to the bank credit facilities are consummated, there is increased risk that
Bowater may not have sufficient liquidity to support its operations over the next 12 months. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">On March&nbsp;13, 2009, our affiliate,
Abitibi-Consolidated Inc., announced a comprehensive recapitalization plan that is intended to reduce Abitibi&#146;s debt burden and enhance its liquidity. Among other benefits, management expects the recapitalization plan will reduce Abitibi&#146;s
net debt by $2.4&nbsp;billion, lower its annual interest expense by $162&nbsp;million and raise $350&nbsp;million through the issuance of new notes of Abitibi and common stock and warrants of AbitibiBowater. The share and warrant issuance by
AbitibiBowater is expected, on a fully-diluted basis, to exceed 90% of AbitibiBowater&#146;s currently outstanding common stock. As a result, the issuance would normally require approval of AbitibiBowater&#146;s stockholders according to listing
requirements of the New York Stock Exchange (the &#147;NYSE&#148;). However, pursuant to an exception provided by the NYSE, the Board of Directors and Audit Committee of AbitibiBowater determined that the delay associated with such a stockholder
vote would seriously jeopardize AbitibiBowater&#146;s financial viability and thus AbitibiBowater has determined not to seek shareholder approval in this instance. In connection with Abitibi&#146;s recapitalization plan, an interim court order has
been issued by the Commercial Division of the Superior Court of Qu&eacute;bec in Montr&eacute;al pursuant to the Canada Business Corporations Act and meetings of noteholders and lenders impacted by the recapitalization plan have been called for
April&nbsp;30, 2009 in Montr&eacute;al. Among other approval requirements that may be required, the recapitalization plan will be subject to a final order from the Superior Court of Qu&eacute;bec in Montr&eacute;al. In the event such approval is not
received or if it is determined prior to the receipt of such approval that Abitibi does not have sufficient liquidity to continue as a going concern, Abitibi may be compelled to seek protection under or be forced into a proceeding under
Canada&#146;s Companies&#146; Creditors Arrangement Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result of the severely constrained liquidity at Bowater and Abitibi, the
consolidated financial statements to be filed with AbitibiBowater&#146;s Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2008 are expected to contain disclosures stating that there is substantial doubt as to the ability of
AbitibiBowater, as well as Bowater and Abitibi, to continue as a going concern. To the extent AbitibiBowater&#146;s audited consolidated financial statements for the year ended December&nbsp;31, 2008 contain a &#147;going concern&#148; audit
opinion, then the lender under Abitibi&#146;s securitization program will have the right, after applicable notice periods, to terminate the securitization program. Any such termination of the Abitibi securitization program would further impact
Abitibi&#146;s already extremely limited liquidity position and, if not replaced with a securitization facility of similar size with similar terms, Abitibi could be forced to seek bankruptcy protection, or be forced into a bankruptcy proceeding
under Canada&#146;s Companies&#146; Creditors Arrangement Act, notwithstanding its recapitalization plans described above.<B> </B>Further, if Bowater is unsuccessful in immediately addressing its liquidity situation or completing the refinancing
plans described in the Offering Circular, Bowater also may be compelled to seek bankruptcy protection, or be forced into a bankruptcy proceeding, under the U.S. Bankruptcy Code. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">1 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Although there are no cross-defaults or cross-acceleration provisions under Bowater&#146;s obligations in
the event of a default or acceleration under Abitibi&#146;s obligations, any of the developments described above with respect to Abitibi could significantly and adversely impact Bowater through tightening trade credit and negative customer reaction,
among other results, all of which would put additional operational and financial pressure on Bowater. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>RISK FACTORS </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The following risk factors supplement the information included in the Offering Circular under the caption &#147;Risk Factors.&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Our Abitibi and Bowater subsidiaries are both experiencing severe liquidity constraints and face significant near-term debt maturities. We may be unable to address
our liquidity concerns in an adequate or timely manner and Abitibi and Bowater may be unable to repay, renew or extend their respective indebtedness. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">As of December&nbsp;31, 2008, AbitibiBowater had cash-on-hand of approximately $192&nbsp;million (including approximately $42&nbsp;million at Bowater, approximately $133&nbsp;million at Abitibi and approximately
$17&nbsp;million at Donohue Corp.). Additionally, at December&nbsp;31, 2008, Bowater had $59&nbsp;million of availability under its U.S. and Canadian bank credit facilities. As a result of an approximate $65&nbsp;million decrease in availability
under Bowater&#146;s U.S. bank credit facility resulting from a reduction in the borrowing base calculation (due principally to declines in accounts receivable and inventory during December&nbsp;2008 and significant scheduled commitment reductions),
Bowater was in an &#147;overadvanced&#148; position by approximately $51&nbsp;million in early February&nbsp;2009. On February&nbsp;5, 2009, Bowater repaid the overadvance, leaving $10&nbsp;million unused under its bank credit facilities and minimum
levels of cash-on-hand. To augment Bowater&#146;s liquidity in light of the reduction in availability under the bank credit facilities, Bowater Canadian Forest Products Inc. (&#147;BCFPI&#148;), a subsidiary of Bowater, received an advance in the
amount of $12&nbsp;million from Fairfax Financial Holdings Limited and its subsidiaries (&#147;Fairfax&#148;). Bowater expects to repay this advance by March&nbsp;31, 2009. During January, February and early March of 2009, Abitibi experienced a
considerable decrease in liquidity due to a significant interest payment, lower advances from its accounts receivable securitization program due to lower sales activity as a result of current industry and global economic conditions, a significant
reduction in the maximum commitment under the securitization program, as discussed below, and a $7&nbsp;million waiver fee it paid in February&nbsp;2009 in connection with a waiver and amendment to the securitization program. Consequently, the
liquidity of both Abitibi and Bowater is currently severely constrained. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As of December&nbsp;31, 2008, we had in excess of $1 billion of
maturities and repayment obligations that come due before the end of August&nbsp;2009 and significant maturities that come due in 2010 and beyond. Bowater&#146;s Canadian bank credit facility is scheduled to mature in June&nbsp;2009. Abitibi has a
$347&nbsp;million term loan due March&nbsp;30, 2009 (the &#147;Term Loan&#148;) that has not been refinanced and $201&nbsp;million outstanding as of February&nbsp;27, 2009 under an accounts receivable securitization program that is scheduled to
terminate in July&nbsp;2009, but may be terminated earlier if we receive a going concern audit opinion. Additionally, Abitibi has approximately $8&nbsp;million of 7.875% notes due August&nbsp;1, 2009, $293&nbsp;million of 15.50% notes due
July&nbsp;15, 2010 and $395&nbsp;million of 8.55% notes due August&nbsp;1, 2010. Bowater has approximately $248&nbsp;million outstanding aggregate principal amount of 9.00% Debentures that mature August&nbsp;1, 2009 and approximately
$234&nbsp;million outstanding aggregate principal amount of Floating Rate Senior Notes that mature March&nbsp;15, 2010. Certain parameters that form part of the borrowing base calculation of Bowater&#146;s bank credit facilities are scheduled to be
reduced by an aggregate of $138&nbsp;million by March&nbsp;31, 2009 (subject to a possible partial extension to April&nbsp;29, 2009 under certain circumstances). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">On February&nbsp;26, 2009, Abitibi and Donohue Corp. (the &#147;participants&#148;) and the other parties to the accounts receivable securitization program entered into a waiver and amendment to the program, following
the prior notification to Abitibi that the average delinquency ratio for the months of </FONT>
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<FONT FACE="Times New Roman" SIZE="2">November&nbsp;2008 through January&nbsp;2009 exceeded the maximum percentage permitted, which constituted an event of termination under the terms of the
program. Pursuant to such waiver and amendment, the parties agreed to waive (i)&nbsp;the event of termination under the program and (ii)&nbsp;the participants&#146; potential non-compliance with the average delinquency ratio, until the earliest of
the following dates (such earliest date being the &#147;Waiver Termination Date&#148;): (a)&nbsp;March&nbsp;27, 2009, (b)&nbsp;the date on which Abitibi or any of its affiliates enter into any amendment to the Term Loan and (c)&nbsp;the date on
which the Term Loan becomes due and payable or is prepaid or repaid in full. The waiver and amendment also reduced the maximum commitment under the program from $350&nbsp;million to $210&nbsp;million. As consideration for entering into the waiver
and amendment, the participants are required to pay a fee equal to 5% of $210 million, of which $7&nbsp;million was paid on February&nbsp;26, 2009 and $3.5&nbsp;million must be paid on the earliest of (i)&nbsp;March&nbsp;19, 2009, (ii)&nbsp;the
Waiver Termination Date and (iii)&nbsp;the termination of the program. As of February&nbsp;27, 2009, approximately $201&nbsp;million was outstanding under the program. Despite this waiver and amendment, in the event we receive a going concern
opinion from our independent auditors, as expected, the securitization program may be terminated. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In addition, both Abitibi and Bowater
experienced substantial negative operating cash flows in 2008, as a result of a significant decline in sales volume during 2008, and thereafter, Abitibi and Bowater have both reduced production as a result of the decreased demand and significant
cost pressures from recycled fiber and energy prices. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As a result of the above factors, both Abitibi&#146;s and Bowater&#146;s liquidity
positions are currently severely constrained. The maintenance of sufficient short-term operating liquidity at Abitibi will continue to be highly dependent on a number of factors, including the successful refinancing or extension of the Term Loan and
accounts receivable securitization program, as well as the successful and timely completion of significant asset sales, including the sale of various hydroelectric assets. The maintenance of sufficient short-term operating liquidity at Bowater will
continue to be highly dependent on a number of factors, including the successful refinancing of its near-term debt maturities and amendments to its bank credit facilities to modify the borrowing base provisions and to extend the maturity date of its
Canadian bank credit facility. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">To address Abitibi&#146;s tightening liquidity pressures, on March&nbsp;13, 2009, Abitibi commenced a
comprehensive recapitalization plan, which we expect, if successful, will significantly improve Abitibi&#146;s financial position. Although we anticipate a successful completion of Abitibi&#146;s recapitalization plan and Bowater&#146;s exchange
offers and Concurrent Notes Offering, considering current market conditions and the instability of the credit markets, no assurance can be made that we will be able to complete these transactions, or that they will be completed on terms that are
acceptable to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If Abitibi and Bowater are unable to complete their respective refinancing activities and generate sufficient positive
cash flows from operations, they will be unable to separately fund their operations and meet their near-term repayment obligations when due, which would result in defaults under their respective obligations, which would in turn trigger
cross-defaults or cross-accelerations under their other respective indebtedness, which would permit the holders of such indebtedness to accelerate Abitibi&#146;s or Bowater&#146;s respective repayment obligations under them. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If we are unsuccessful in immediately addressing Abitibi&#146;s and Bowater&#146;s liquidity crises or timely completing their refinancing activities,
Abitibi or Bowater may be compelled to seek protection under or be forced into a proceeding under the U.S. Bankruptcy Code or Abitibi may be compelled to seek protection under or be forced into a proceeding under Canada&#146;s Companies&#146;
Creditors Arrangement Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">These circumstances, as well as the uncertainty related to cash flows from operations, lend substantial doubt
as to the separate ability of Abitibi and Bowater to meet their respective obligations as they come due and, accordingly, the appropriateness of Abitibi&#146;s and Bowater&#146;s use of accounting principles applicable to a going concern.
Abitibi&#146;s and Bowater&#146;s ability to continue as a going concern is </FONT>
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<FONT FACE="Times New Roman" SIZE="2">substantially dependent on the successful completion of each of their respective refinancing activities and within the timelines contemplated by their
separate refinancing plans, as well as the generation of sufficient positive cash flows from operations to maintain and enhance their liquidity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><B><I>There is substantial doubt about AbitibiBowater&#146;s ability to continue as a going concern. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The uncertainty of
the successful execution of Bowater&#146;s exchange offers and Concurrent Notes Offering, Abitibi&#146;s comprehensive recapitalization plan and the other refinancing initiatives, as well as the uncertainty of generating sufficient positive cash
flows from operations lend substantial doubt about each of Abitibi&#146;s and Bowater&#146;s ability to continue as a going concern. Abitibi and Bowater collectively represented substantially all of AbitibiBowater&#146;s consolidated net assets as
of December&nbsp;31, 2008 and substantially all of AbitibiBowater&#146;s consolidated sales for the year ended December&nbsp;31, 2008. The substantial doubt about both Abitibi&#146;s and Bowater&#146;s ability to continue as a going concern raises
substantial doubt about AbitibiBowater&#146;s ability to continue as a going concern. As a result, AbitibiBowater&#146;s consolidated financial statements to be included in its Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2008 are expected to state that the consolidated financial statements were prepared assuming we will continue as a going concern, but are expected to further state that our recurring losses from operations and inability to generate sufficient cash
flow to meet our obligations and sustain our operations raise substantial doubt about AbitibiBowater&#146;s, Abitibi&#146;s and Bowater&#146;s respective abilities to continue as going concerns. U.S. auditing standards will require that any opinion
issued by our independent registered public accounting firm on those consolidated financial statements be modified to make reference to this disclosure and the substantial doubt about our ability to continue as a going concern. AbitibiBowater&#146;s
future viability is dependent on its ability to successfully execute the refinancing initiatives, including Bowater&#146;s exchange offers and Concurrent Notes Offering and Abitibi&#146;s comprehensive recapitalization plan, and to generate
sufficient cash flow to meet our obligations and sustain our operations, or otherwise address these matters. If AbitibiBowater fails to do so for any reason, it may not be able to continue as a going concern and could potentially be forced to seek
relief through a filing under the U.S. Bankruptcy Code and/or Canada&#146;s Companies&#146; Creditors Arrangement Act. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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