Mercer International has postponed a US$25.8 million interest payment on its 2028 senior notes while talks with major bondholders continue over a possible recapitalisation of the company.<\/p>\n
The payment, due on October 1, relates to Mercer\u2019s 12.875% Senior Notes due 2028. Rather than making the payment immediately, Mercer has entered the 30-day grace period allowed under the bond terms. The company said the decision does not itself constitute an event of default.<\/p>\n
The deferral comes as Mercer works with an ad hoc group of investors that controls more than 75% of the outstanding principal across its 2028 and 2029 senior notes.<\/p>\n
Negotiations are focused on a broader financial restructuring that could include a sizeable capital injection, lower debt and reduced interest costs. Mercer said the objective is to improve liquidity and deal with upcoming maturities. No final agreement has been announced.<\/p>\n
Liquidity has become a central issue<\/strong><\/p>\n Mercer entered the second half of 2026 under increasing financial pressure. In the second quarter, the company posted negative Operating EBITDA of US$21 million and a net loss of US$76 million. The result included a non-cash inventory impairment of US$29 million, mainly linked to pulp and fibre inventories.<\/p>\n For the first six months of the year, Mercer reported a net loss of roughly US$128 million, while operating activities consumed around US$101 million in cash.<\/p>\n The company had already begun reviewing strategic and financing alternatives before the October payment date, with a focus on strengthening its balance sheet and extending its financial flexibility.<\/p>\n Mercer has said its pulp, lumber and mass timber operations continue to run normally and that suppliers, customers, contractors and employees continue to be paid in the ordinary course of business.<\/p>\n German operations already under restructuring<\/strong><\/p>\n The financial pressure has also been visible in Germany. Earlier this year, Mercer announced a restructuring programme at its Torgau site, where production capacity, the product mix and staffing levels are being adjusted.<\/p>\n The company linked the measures to weak market conditions, elevated wood and energy costs and the need to improve the competitiveness of the operation.<\/p>\n Around 100 temporary workers were removed immediately, while the total workforce reduction could eventually reach about 350 positions.<\/p>\n Mercer has not said that the German restructuring caused the delayed interest payment. The two developments do, however, point in the same direction: preserving cash, lowering costs and adapting the business to a weaker operating environment while debt negotiations continue.<\/p>\n Cost reductions continue<\/strong><\/p>\n Mercer is also pursuing its \u201cOne Goal One Hundred\u201d programme, which targets US$100 million in savings and operating improvements by the end of 2026.<\/p>\n By the second quarter, the company said approximately US$54 million in benefits had already been achieved since the programme began in April 2025.<\/p>\n The bond discussions now represent the next critical step. If Mercer reaches an agreement with noteholders during the grace period, the transaction could materially change the group\u2019s debt profile and financing costs. If not, pressure on liquidity would increase sharply as the 30-day deadline approaches.<\/p>\n The company said it remains optimistic that a transaction can be reached, but stressed that there is no certainty that negotiations will result in a definitive agreement.<\/p>","protected":false},"excerpt":{"rendered":" Mercer International has postponed a US$25.8 million interest payment on its 2028 senior notes while talks with major bondholders continue over a possible recapitalisation of the company.<\/p>","protected":false},"author":1,"featured_media":100188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[5204],"tags":[],"class_list":["post-100187","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n