The pulp and lumber producer plans to restructure through Chapter 11, bringing in $400 million in fresh funding while keeping its mills open and suppliers paid.<\/p>\n
Mercer International has agreed on a financial restructuring that would put creditors in control of the company, following months of losses, falling cash reserves and pressure from high wood costs.<\/p>\n
The agreement, announced on November 2, would exchange about $1.1 billion of existing bond debt for shares and provide $400 million in new funding. Mercer plans to carry out the deal through a prepackaged Chapter 11 process in the United States, with much of the support needed already secured.<\/p>\n
For customers, suppliers and employees, the company says business will continue as usual. Its mills in Germany, Canada and the United States will keep operating, and it expects to maintain deliveries, pay suppliers and meet payroll.<\/p>\n
The planned court filing covers Mercer International and a non-operating subsidiary in Texas. Its operating subsidiaries will remain outside the proceedings.<\/p>\n
Holders of more than 87% of the bonds covered by the agreement, along with shareholders representing a majority of existing shares, have backed the plan. Mercer expects court approval within roughly 45 days of filing and aims to complete the restructuring by the end of 2026, subject to regulatory approvals.<\/p>\n
The agreement follows a difficult first half of the year. As GWMI previously reported, Mercer lost approximately $128 million during the period, while its operations consumed around $101 million in cash. Cash reserves fell from $186.8 million at the end of 2025 to $78.8 million at the end of June.<\/p>\n
That pressure became more visible in October, when Mercer postponed a $25.8 million interest payment while negotiating with creditors. The grace period for that payment was later extended from 30 to 90 days.<\/p>\n
The proposed debt exchange would remove about $96 million in annual interest payments attached to the existing bonds. Together with the fresh funding, this would give Mercer more room to fund its operations while continuing efforts to lower costs.<\/p>\n
Existing shareholders would retain a small stake: about 8.5% of the new common shares. Their current shares would be cancelled when the plan takes effect. Mercer expects its stock to be delisted from Nasdaq after the filing and intends to seek a new listing following the restructuring.<\/p>\n
The financial deal comes alongside changes already under way at Mercer\u2019s mills. At Torgau in Germany, the company has been adjusting production, its product range and staffing in response to weak market conditions and high wood and energy costs. The announced workforce reduction could reach around 350 positions, including approximately 100 contractor positions identified initially.<\/p>\n
Across the group, Mercer is targeting $100 million in savings and operating improvements by the end of 2026. By the second quarter, it said it had achieved around $54 million since the programme began in April 2025.<\/p>\n
The restructuring would ease the pressure from Mercer\u2019s debt, but the problems facing its mills remain. Wood costs, competition for fibre and a slow market recovery will continue to shape the company\u2019s performance after the deal closes.<\/p>","protected":false},"excerpt":{"rendered":"
The pulp and lumber producer plans to restructure through Chapter 11, bringing in $400 million in fresh funding while keeping its mills open and suppliers paid.<\/p>","protected":false},"author":1,"featured_media":100529,"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-100528","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news"],"acf":[],"yoast_head":"\n