Mercer Strikes Prepackaged Chapter 11 Deal to Cut $1.1B of Senior Notes, Raise $400M
MERC sits 29% above its 52-week low of $0.116 on light trading volume (0.3× avg).
Summary
Mercer signed restructuring support agreements with holders of more than 87% of its Senior Notes and a majority of its common stock to implement a prepackaged Chapter 11 plan to restructure $1.27 billion of Senior Notes. Roughly $1.1 billion of Senior Notes convert to equity, cutting that debt by about 88% and eliminating roughly $96 million of annual cash interest, with no bond maturities until 2031. The deal brings $400 million of new money through a fully backstopped rights offering of new senior secured notes, plus a new $325 million convertible preferred and up to $300 million of revolving commitments. Existing shareholders keep only about 8.5% of new common stock and 3.5% of new convertible preferred, and the current shares get cancelled on the plan's effective date. This follows the October 2 8-K disclosing advanced talks and the skipped $25.8 million interest payment, and the October reports of a possible Chapter 11 filing. Mercer expects a Nasdaq delisting notice and possible OTC quotation of the existing stock; plan confirmation is targeted within about 45 days of filing, with completion by end of 2026.
At the time of this announcement, MERC was trading at $0.15 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $8.4M. The 52-week trading range was $0.12 to $2.85. This news item was assessed with neutral market sentiment and an importance score of 9 out of 10. Source: GlobeNewswire.