AbitibiBowater Inc. and the union representing most of the newsprint maker's Canadian workers have reached a tentative deal that could allow the company to emerge from bankruptcy protection.

After months of tough negotiations, the Communications, Energy and Paperworkers union announced Sunday that a tentative agreement to renew the collective agreement had been reached.Debt-strapped newsprint giant AbitibiBowater Inc. filed for bankruptcy protection in Canada and the United States last April. (Paul Chiasson/Canadian Press)

A ratification vote will be held later this month. Pension regulators in Quebec and Ontario must also give their nod.

The union said the breakthrough came when the forestry company withdrew an earlier proposal to terminate pension plans, which it said would have slashed pension benefits by an average of 25 per cent.

No details of the tentative deal have been released. But the deal requires workers to make wage concessions that would be used to bolster company pension funds.

The tentative deal covers about 4,500 workers at 12 pulp and paper mills in Eastern Canada. It also covers 8,000 retirees.

"We have the best possible agreement, given the precarious financial condition of the company," said CEP president Dave Coles in a statement. "Our members will no longer have to fear the shadow of an insolvency of their plan."

The CEP said it's up to the Quebec government to make regulatory changes so the Montreal-based company can carry out the necessary pension fixes.

Striking a deal with the union was a necessary step before AbitibiBowater could complete its restructuring process.

"Agreements with the unions are an important component of the restructuring process so it's certainly an important headway in that direction, but we need to negotiate with the remaining unions as well," company spokesman Jean-Philippe Coté said.

Talks with other unions representing 1,200 workers are still underway.

The company has been operating under creditor protection in both Canada and the United States for almost a year. It filed to restructure after struggling amid slumping newsprint demand and debts approaching $5 billion.

With files from The Canadian Press