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.
According to Mercer, this is a balance sheet recapitalization only. Its mills in Germany, Canada and the United States are operating as usual, and the company expect to continue to meet its commitments to customers, suppliers and employees in the ordinary course.
Nov. 3, 2026 - Mercer International Inc. ( MERC ) (“Mercer” or the “Company”) [on Nov. 2] announced that it has entered into restructuring support agreements (the “RSAs”) with holders of more than 87% of the aggregate outstanding principal amount of its 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029 (together, the “Senior Notes”), including the members of an ad hoc group of noteholders (the “Ad Hoc Group”), and with holders of a majority of the outstanding shares of its common stock. The RSAs set out the terms of a comprehensive recapitalization of the Company (the “Recapitalization”) that is expected to significantly reduce Mercer’s debt, extend its maturity runway and provide substantial new liquidity.
Juan Carlos Bueno, President and Chief Executive Officer, stated: "This transaction is a decisive step forward for Mercer and is the result of constructive and arm's-length negotiations between Mercer and key stakeholder groups.
With the support of the majority of our noteholders and shareholders, we are putting in place a much stronger balance sheet and the liquidity to navigate current pulp and lumber market and geopolitical conditions. Upon emergence, we will be better positioned to invest in, and grow, our business.
This is a balance sheet recapitalization only. Our mills in Germany, Canada and the United States are operating as usual, and we expect to continue to meet our commitments to customers, suppliers and employees in the ordinary course.”
Mr. Bueno continued, “I want to thank our employees for their dedication and hard work, our customers, suppliers and community partners for their continued support, and our noteholders and shareholders for their confidence in Mercer’s future. Their support reflects their confidence in our people, long-term business plan and high-quality pulp, lumber and mass timber products. We look forward to completing this process efficiently and emerging as a stronger company."
The Recapitalization
The RSAs provide for the following principal terms, among others:
In connection with the Recapitalization, the Company expects to repay, in whole or in part, its existing credit facilities and establish one or more new revolving credit facilities providing up to $300 million of aggregate revolving commitments.
The foregoing is a summary only. The RSAs will be filed as an exhibit to a Current Report on Form 8-K with the U.S. Securities and Exchange Commission, and investors should refer to those documents for further information, including their complete terms.
Implementation of the Recapitalization
To implement the transactions, Mercer and Mercer International ( MERC ) (Texas) LLC, a non-operating U.S. subsidiary, expect to commence voluntary Chapter 11 prepackaged cases under the United States Bankruptcy Code (the "Chapter 11 Cases") and file a plan of reorganization (the "Plan") in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Court"). Completion of the Recapitalization is subject to customary conditions, including any requisite regulatory approvals and the Company is optimistic that it will be able to conclude this expedited Chapter 11 process by the end of 2026.
Mercer’s common stock continues to trade on Nasdaq under the symbol “MERC.” Nasdaq has discretionary authority under its listing rules to delist the securities of a company that commences Chapter 11 cases, and Mercer expects that it will receive notice from Nasdaq that it has determined to delist the common stock. If trading of the common stock on Nasdaq is suspended, Mercer expects that its common stock will be quoted on an over-the-counter market, although there can be no assurance that it will be quoted or that an active trading market will exist.
When the Recapitalization is completed, the existing common stock will be cancelled and holders will receive their pro rata share of the new common stock and new convertible preferred stock described above. On or after the effective date of the Plan, the Company intends to apply to list the new common stock on Nasdaq or another national securities exchange, subject to meeting the applicable initial listing requirements, and expects to continue to file periodic reports with the Securities and Exchange Commission. Shareholders will not need to take any action to receive their new securities, other than voting on the Plan if they wish to do so.
2028 Senior Notes Supplemental Indenture
As previously announced, Mercer elected not to make the interest payment due October 1, 2026 on its 12.875% Senior Notes due 2028 and to utilize the applicable grace period. On October 30, 2026, Mercer entered into a supplemental indenture extending that grace period from 30 calendar days to 90 calendar days.
Advisors
Houlihan Lokey is serving as investment banker, Alvarez & Marsal is serving as financial advisor, and Latham & Watkins LLP and Sangra Moller LLP are serving as legal counsel to the Company. Ducera Partners LLC is serving as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to the Ad Hoc Group. Stretto, Inc. is serving as claims and solicitation agent under the Recapitalization.
Additional Information
For additional information regarding the Restructuring, including related materials, please visit the Company’s investor relations website at https://mercerint.com/investors/.
About Mercer International Inc. ( MERC )
No Offer or Solicitation
This press release is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. This press release is not a solicitation of votes to accept or reject the Plan or any other Chapter 11 plan. Any such solicitation will be made only pursuant to and in accordance with the disclosure statement and related solicitation materials, and only to the extent permitted by applicable law. The New Money Senior Secured Notes, put option notes, takeback senior secured notes and any new common stock or new convertible preferred stock to be issued in connection with the Rights Offering have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration. The new common stock and new convertible preferred stock to be distributed under the Plan, other than in connection with the Rights Offering, are expected to be issued pursuant to section 1145 of the Bankruptcy Code or another available exemption from registration under the Securities Act.
Mercer International Inc. ( MERC ) is a global forest products company with operations in Germany, the United States and Canada with consolidated annual production capacity of 2.1 million tonnes of pulp, 1,023 million board feet of lumber, 210,000 cubic meters of cross-laminated timber, 45,000 cubic meters of glulam, 17 million pallets and 230,000 metric tonnes of biofuels.
SOURCE: Mercer International Inc.