Mercer International is reportedly considering a possible Chapter 11 filing while negotiating a recapitalisation with holders of more than 75% of its 2028 and 2029 notes. The company has also used a 30-day grace period on approximately USD 25.8m of interest due 1 October 2026 on its 12.875% senior notes maturing 2028. Mercer says any agreement, its timing and terms remain uncertain, and that operations and supplier payments continue as normal.
Why this mattersA recapitalisation cutting funded debt would impose losses or dilution on Mercer's noteholders and set a reference point for lenders to other leveraged pulp producers.
- Mercer confirmed advanced recapitalisation talks with holders of more than 75% of combined 2028 and 2029 notes principal
- Company used 30-day grace period on approximately USD 25.8m of interest due 1 October 2026 on 12.875% senior notes maturing 2028
- Proposed transaction would combine new capital with a substantial reduction in funded debt and interest expense
- Use of the grace period does not itself constitute an event of default under the indenture
- Pulp, lumber and mass timber operations and payments to suppliers, contractors and employees continue as normal
- Mercer's confirmed regulatory disclosure did not announce a Chapter 11 filing
Mercer International has resumed discharging treated wastewater from its Rosenthal pulp mill in Germany into the Saale, after water samples showed pollutant levels back to normal and the Saale-Orla district lifted its precautionary swimming ban on the southern Bleiloch Reservoir. Discharge had been halted in early October, with effluent held in on-site buffer basins, after discolouration and dead fish were found near the outfall following a four-week maintenance period. The company says it is preparing to resume cellulose production; the substances involved have not been identified.
Why this mattersThe all-clear lets Rosenthal move back toward pulp production after an early-October discharge halt, though the substances behind the fish kill remain unidentified.
- Mercer says it resumed discharging treated effluent at the Rosenthal mill on 3 October 2026 after water samples showed pollutant levels back to normal
- The Saale-Orla district authority lifted its precautionary swimming ban in the southern Bleiloch Reservoir following the test results
- Discolouration and dead fish were detected near the discharge point in early October 2026, after a four-week maintenance period
- Wastewater was held in on-site buffer basins during the investigation
- The specific contaminants have not been identified; the mill is preparing to resume cellulose production
Mercer International has suspended the restart of its Rosenthal kraft pulp mill in Germany after discolouration was detected near its wastewater discharge point into the Saale River, following a roughly four-week scheduled maintenance shutdown. The Saale-Orla District Office has imposed a precautionary swimming ban in part of the Bleiloch Reservoir while an investigation continues, and the mill is holding wastewater in buffer tanks.
Why this mattersAn unplanned halt at a 360,000 tonne mill tightens kraft pulp supply to German and Italian paper and tissue buyers while regulators investigate the discharge.
- Rosenthal mill has 360,000 tonnes per year of kraft pulp capacity
- Restart followed a scheduled maintenance shutdown of about four weeks
- Discolouration was found near the wastewater discharge point into the Saale River
- Saale-Orla District Office imposed a precautionary swimming ban in the southern Bleiloch Reservoir
- Wastewater is being held in buffer tanks pending investigation
- The Rosenthal site also operates a biomass power plant of 413 MW thermal and 57 MW electrical capacity
- Discharge from the mill's own treatment plant into the Saale resumed gradually from 3 October 2026, coordinated with environmental authorities.
- Mercer is preparing to restart pulp production at Rosenthal following the resumed discharge.
- Rosenthal supplies kraft pulp mainly to customers in Germany and Italy.
Mercer International has deferred an interest payment of about USD 25.8m due 1 October 2026 on its 12.875% Senior Notes due 2028, invoking a 30-day grace period under the indenture. The pulp and lumber producer is in advanced talks with an ad hoc group holding more than 75% of the outstanding principal of both the 2028 notes and its 5.125% Senior Notes due 2029 on a comprehensive recapitalisation to cut funded debt and interest expense. Mercer says no definitive agreement has been reached and operations continue as normal.
Why this mattersA deferred coupon and talks with holders of more than 75% of two bond issues point to a balance-sheet restructuring at a significant market pulp supplier.
- Mercer deferred approximately USD 25.8m of interest due 1 October 2026 on its 12.875% Senior Notes maturing 2028.
- The company is using a 30-day grace period under the indenture and says this does not constitute an event of default.
- An ad hoc group holds more than 75% of the aggregate outstanding principal of the 2028 notes and the 5.125% Senior Notes due 2029.
- Talks aim at a recapitalisation to reduce funded debt and interest expense, address maturities and improve liquidity.
- A special committee of independent directors is leading the talks; the 8-K was signed by CFO Richard Short.
- Mercer says its pulp, lumber and mass timber operations continue normally, with customers, suppliers and employees served and paid as usual.
Mercer International reported a USD 76.0m net loss on USD 460.3m of revenue in the second quarter of 2026 and is in confidential talks with bondholders over a potential liability management transaction, after flagging going-concern risk in its 6 August 2026 10-Q. Fitch Ratings affirmed the pulp producer's long-term issuer default rating at CCC with a stable outlook on 1 October 2026, citing stable liquidity despite timber price volatility. Mercer is cutting 350 jobs at its Torgau site in stages through the second quarter of 2027 as part of a USD 100.0m savings drive targeted for year-end 2026.
Why this mattersA going-concern warning, liability management talks and an affirmed CCC rating point to balance-sheet stress that could reshape ownership and market pulp supply.
- Q2 2026 revenue was USD 460.3m, up 1.5 percent year on year, with a net loss of USD 76.0m
- Operating EBITDA was negative USD 21.0m, roughly flat with negative USD 20.9m a year earlier
- Mercer's 6 August 2026 10-Q carried a going-concern warning, with liquidity of USD 191.7m including USD 78.8m cash
- The company is in confidential talks with bondholders over a potential liability management transaction, reported 15 September 2026
- Mercer plans to cut 350 positions at its Torgau site in stages through Q2 2027 as part of a USD 100.0m year-end 2026 savings target
- Fitch Ratings affirmed Mercer's Long-Term Issuer Default Rating at CCC with a stable outlook on 1 October 2026, citing stable liquidity and operating performance
Mercer International is curtailing production this month at its 360,000 tonne-per-year Rosenthal northern bleached softwood kraft mill in Germany, for a mix of scheduled maintenance and market-related reasons. The downtime comes as Mercer continues to switch its Celgar mill from NBSK to unbleached kraft pulp on a weaker NBSK market. US NBSK spot prices to the East and Midwest rose USD 5 per tonne to USD 700-720 net delivered through 11 September 2026.
Why this mattersEuropean downtime and announced Canadian closures are thinning spot NBSK availability, giving producers their first price gain in months.
- Rosenthal has capacity of 360,000 tonnes a year of NBSK pulp.
- The September 2026 curtailment covers both scheduled maintenance and market-related downtime.
- Mercer is shifting Celgar output from NBSK to unbleached kraft pulp on a weaker NBSK market.
- US NBSK spot prices to the East and Midwest rose USD 5 per tonne to USD 700-720 per tonne net delivered through 11 September 2026.
- Preliminary September US NBSK contract list prices were unchanged at USD 1,570 per tonne; SBSK was flat at USD 1,505 per tonne.
- Announced closures of Canfor and Domtar market NBSK mills in Canada have so far had little price impact.
