Mercer International signs prepackaged Chapter 11 recapitalisation deal
Mercer International has reached restructuring support agreements with holders of more than 87% of its senior notes and a majority of common shares to cut debt via a prepackaged Chapter 11 filing. The plan addresses USD 1.275bn of senior notes, exchanging about USD 1.1bn for equity and cutting annual cash interest by about USD 96m, alongside USD 400m of new fully backstopped capital. Mercer expects to file in the US Bankruptcy Court for the Southern District of Texas, with plan confirmation about 45 days later and completion targeted by end-2026.
Why this mattersThe debt-for-equity swap hands control to noteholders, leaves existing shareholders with 8.5% of the common stock and gives the pulp and lumber producer no bond maturities until 2031.
- Restructuring support agreements cover more than 87% of senior notes and a majority of common shares
- USD 1.275bn of senior notes addressed, with about USD 1.1bn to be exchanged for equity, an 88% cut to senior-note debt
- Annual cash interest reduced by approximately USD 96m, with no bond maturities until 2031
- USD 400m of new capital to come from a fully backstopped rights offering of USD 420m of new senior secured notes, including USD 20m of original issue discount
- Existing common shareholders to receive 8.5% of new common stock and 3.5% of new convertible preferred stock; existing shares cancelled when the plan takes effect
- Prepackaged Chapter 11 cases to be filed in the US Bankruptcy Court, Southern District of Texas; confirmation expected about 45 days after filing, completion targeted by end-2026