JAY — Verso Corp. is expected to emerge from Chapter 11 bankruptcy protection by the end of July. The U.S. Bankruptcy Court in the District of Delaware confirmed Verso’s restructuring plan on Thursday, according to a Verso release. 

The company and 26 subsidiaries voluntarily entered into bankruptcy protection on Jan. 26 to restructure its debt. Verso has several paper mills, including the Verso Androscoggin Mill in Jay.

The confirmation comes less than five months after Verso and its subsidiaries filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.

Verso’s restructuring will reduce the company’s debt by approximately $2.4 billion upon emergence, according to a company release. 

Verso expects to emerge from bankruptcy with $595 million in exit financing to support ongoing operations and capital investments. The exit financing will consist of an asset-based lending facility with borrowing capacity of up to $375 million led by Wells Fargo Bank, National Association, and a $220 million term loan facility with available loan proceeds of $198 million led by Barclays Bank PLC, according to the release.

“Verso is extremely pleased with this speedy and successful outcome,” David J. Paterson, Verso president and chief executive officer said in the release. “Our smooth path through this critical step in the restructuring process would not have been possible without the strong support of our funded debt-holders and the Official Unsecured Creditors Committee and the affirmative vote on our plan of reorganization by our creditors. Their confidence in Verso’s prospects for long-term value creation sets the stage as we chart our course to a sustainable financial future.”

 The confirmed plan of reorganization requires no material changes in the course of business to Verso’s wages and salaries, benefits, pension plans or collective bargaining agreements, according to the release.

“Verso’s restructuring will not change our fundamental operating strategy,” Paterson said. “With an unwavering commitment to ethical business practices and transparency, we will continue to improve safety, efficiency and operational flexibility at our facilities, reduce costs across the organization, and deliver the world-class products and services our customers have come to expect from us.”

Patterson anticipates future profitability for the company.

“In addition, we anticipate that our unified, highly de-levered capital structure will allow us to make investments in Verso’s business that will help mitigate the continuing decline in the demand for coated paper products, to explore strategic opportunities that enable profitable growth, and to create value for all of our stakeholders,” Paterson explained. “We believe that Verso is poised for sustainable profitability, and we are excited about the opportunities ahead.” 

PJT Partners LP provided restructuring and transaction services and O’Melveny & Myers LLP provided restructuring legal advice and assistance to Verso throughout its restructuring. 

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: