Mercer International is reportedly considering seeking Chapter 11 protection in the United States as it works to restructure its finances following losses and a decline in cash reserves.<\/p>\n
The pulp, lumber and mass timber producer has been cutting costs and reorganising parts of its German operations while negotiating a recapitalisation with major creditors.<\/p>\n
Bloomberg reported on October 21, citing people familiar with the matter, that a filing could come in the following weeks, most likely in Texas. According to the report, creditors would be expected to take control if the process proceeds. No final decision had been made, and the plans could change.<\/p>\n
The possible filing was reported by Bloomberg; Mercer\u2019s October 2 regulatory disclosure confirmed recapitalisation talks but did not announce a Chapter 11 decision.<\/p>\n
Losses and lower cash reserves<\/strong><\/p>\n Mercer recorded a net loss of approximately USD 128 million in the first half of 2026. As GWMI previously reported, operating activities consumed around USD 101 million in cash during the period.<\/p>\n Cash and cash equivalents fell to USD 78.8 million at the end of June from USD 186.8 million at the close of 2025. Including available revolving credit facilities, Mercer reported approximately USD 191.7 million in liquidity, after accounting for a EUR 70 million reduction in borrowing capacity under its German facility.<\/p>\n Second-quarter operating EBITDA was negative USD 21 million, with a net loss of USD 76 million. The figures included a USD 29 million non-cash inventory impairment, mainly associated with pulp and wood raw materials.<\/p>\n Management said European raw-material shortages and competition from energy producers for sawmill residuals had increased costs. Pulp selling prices remained steady during the quarter, while economic uncertainty continued to delay the market recovery.<\/p>\n Restructuring at Torgau<\/strong><\/p>\n Mercer has also been adjusting production capacity, its product mix and staffing at its Torgau operation in Germany.<\/p>\n As GWMI reported earlier, around 100 temporary positions were removed initially, with the total workforce reduction potentially reaching approximately 350. The company linked the measures to weak market conditions, elevated wood and energy costs and efforts to improve the operation\u2019s competitiveness.<\/p>\n Across the group, Mercer\u2019s \u201cOne Goal One Hundred\u201d programme targets USD 100 million in savings and operating improvements by the end of 2026. By the second quarter, the company said approximately USD 54 million had been achieved since the programme began in April 2025.<\/p>\n Recapitalisation talks continue<\/strong><\/p>\n As GWMI reported earlier in October, Mercer postponed a USD 25.8 million interest payment due on October 1 on its 12.875% senior notes maturing in 2028. The company elected to use the contractual 30-day grace period, which it said did not itself constitute an event of default.<\/p>\n In its October 2 disclosure, Mercer said it was in advanced discussions with a group holding more than 75% of the combined outstanding principal of its 2028 and 2029 notes. The proposed recapitalisation would include a substantial capital injection and seek to reduce debt and interest costs.<\/p>\n A special committee of independent directors, together with Mercer\u2019s advisers, was overseeing the negotiations. The company said it hoped to announce a transaction soon, while noting that no definitive agreement was assured.<\/p>\n In the same disclosure, Mercer said its pulp, lumber and mass timber operations continued in the ordinary course, including payments to suppliers, contractors and employees. It said it did not expect the proposed transaction to affect those relationships or obligations.<\/p>","protected":false},"excerpt":{"rendered":" Mercer International is reportedly considering seeking Chapter 11 protection in the United States as it works to restructure its finances following losses and a decline in cash reserves.<\/p>","protected":false},"author":1,"featured_media":100392,"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-100391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n