Mercer International plans Chapter 11 to cut $1.1 billion in debt
Mercer International is moving to restructure its balance sheet through a prepackaged Chapter 11 filing in Texas. The plan includes about $400 million of new money and would convert roughly $1.1 billion of senior notes into equity, sharply reducing the Canadian pulp producer's debt load.
Highlights
- Mercer International will file a prepackaged Chapter 11 case in Texas to exchange about $1.1 billion of senior notes for equity, reducing debt by 88%.
- The restructuring plan includes $400 million of new funding, aiming to improve Mercer's balance sheet and reduce financial leverage.
- The agreement has support from over 87% of senior note holders and a majority of shareholders, indicating broad backing for Mercer's court-supervised restructuring.
Restructuring plan and creditor support
As reported by Bloomberg, citing Mercer International, the company has entered an agreement with holders of more than 87% of its senior notes and a majority of its shareholders to support the restructuring.The transaction would exchange about $1.1 billion of senior notes for equity, cutting that debt by about 88%. Mercer says it plans to file a prepackaged Chapter 11 case in Texas as part of the process.
Balance sheet impact for the pulp producer
The proposed deal is aimed at reducing leverage while bringing in $400 million of fresh funding. For Mercer, the combination of debt reduction and new capital is set to reshape its financial position as it works through the court-supervised restructuring.The agreement signals broad backing from key creditor and shareholder groups, a factor that can help speed a prepackaged bankruptcy process and provide greater visibility for the company's next steps.
In our earlier coverage of Equites Property Fund’s UK exit and capital redeployment, we noted the REIT raised its interim distribution after selling the £200.5 million Aviva portfolio and redirecting funds to South Africa. The move lowered its loan-to-value ratio and strengthened liquidity, supporting its FY27 guidance while positioning the company for domestic logistics-led growth.
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