Mercer International files prepackaged Chapter 11 to implement debt recapitalisation
Mercer International and one non-operating subsidiary have filed voluntary prepackaged Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of Texas, moving its previously agreed recapitalisation into formal court process. The plan, backed by holders of more than 88% of its 2028 and 2029 senior notes, is designed to cut senior-note debt by about 88% and annual cash interest by over USD 100m, while raising USD 400m of new capital through a fully backstopped rights offering. Completion is targeted by year-end; operating subsidiaries are not part of the filing and continue normal business.
Why this mattersA prepackaged plan backed by over 88% of noteholders is designed to cut Mercer's senior-note debt by about 88% while its 2.1m tonnes of pulp capacity keeps operating.
- Mercer International and one non-operating subsidiary filed prepackaged Chapter 11 in the US Bankruptcy Court, Southern District of Texas, Houston Division
- Holders of more than 88% of combined principal of the 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029 support the plan
- Plan expected to reduce senior-note debt by approximately 88% and cut annual cash interest by over USD 100m
- USD 400m of new capital is to be raised through a fully backstopped rights offering
- Completion is targeted by year-end, subject to court confirmation and regulatory approvals
- Mercer expects Nasdaq to suspend trading of its shares, with timing to be disclosed in a subsequent SEC Form 8-K