AbitibiBowater is selling off 75-per cent of its interest in its hydro assets in Ontario.
This includes the hydro dam in Fort Frances.
The deal with an unnamed Canadian institutional investor and a private Canadian renewable energy company is worth $300-million.
Part of the proceeds will be used to pay down the company's debt.
AbitibiBowater says power produced from the hydro dam in Fort Frances will continue to supply its mill under the terms a long-term power purchase agreement.
