Mercer International announces comprehensive recapitalization agreement with significant support from noteholders and shareholders

The Company Has Entered into an Agreement to Effectuate a Balance Sheet Restructuring Which Will Address $1.275 Billion of Senior Notes and Provide $400 Million of Fully Backstopped New Capital to Position Mercer for Long-Term Success

Operations will Continue in the Ordinary Course with No Impact on Customers, Suppliers and Employees

Highlights

• Significantly stronger balance sheet: Approximately $1.1 billion of Senior Notes to be exchanged for equity, reducing existing Senior Note debt by approximately 88%, with minimal cash interest requirements over the first two years following emergence, and no bond maturities until 2031. The Recapitalization eliminates approximately $96 million of annual cash interest on the Senior Notes
• Substantial new capital and liquidity: $400 million of new money through a rights offering of new senior secured notes 100% backstopped by certain members of the Ad Hoc Group to provide significant liquidity to support Mercer’s operations post-emergence
• Meaningful shareholder participation: Existing shareholders to receive approximately 8.5% of the new common stock and 3.5% of the new convertible preferred stock of the reorganized Company
• Strong stakeholder support: Restructuring support agreements signed with holders of more than 87% of outstanding principal amount of Mercer’s Senior Notes and a majority of the outstanding shares of its common stock
• Continuity of business operations: The Company and its operating businesses will continue to operate in the ordinary course of business: customers will continue to be served, vendors and unsecured claims will be paid in the ordinary course, and employee wages and benefits will continue without interruption
• Expedited implementation: The Recapitalization is being implemented through a prepackaged joint Chapter 11 plan of reorganization for Mercer International Inc., the parent company, and Mercer International (Texas) LLC. No other subsidiary is directly impacted by the implementation of the plan of reorganization. Confirmation of the plan of reorganization is expected within approximately 45 days of filing, and the Recapitalization is expected to be completed by the end of 2026, subject to customary conditions, including receipt of any requisite regulatory approvals

You can review the remainder of the release in greater detail here.