JAY — Verso Corp. announced Friday it has emerged from Chapter 11 bankruptcy protection as a much stronger company with significantly reduced debt and a unified capital structure.

The Memphis, Tenn.-based company employs 560 people at its Androscoggin Mill in Jay.

There will be no changes in operations at the mill as a direct result of Verso’s restructuring and emergence from bankruptcy, Kathi Rowzie, Verso Corp.’s vice president of communications and public affairs, said in an email.

“We are very pleased to hear the news that Verso has successfully emerged from bankruptcy and that the process has put them in a stronger position, Jay Town Manager Shiloh LaFreniere said Friday. “We look forward to their future success and are pleased to have the opportunity to continue working with them in the town of Jay.”

Verso and 26 subsidiaries voluntarily filed petitions to restructure to reduce debt under Chapter 11 on Jan. 26.

“It positions the company to fully realize and leverage the benefits of our prior operational improvements, explore opportunities for strategic growth, successfully compete in the global marketplace, and deliver on our corporate mission to create value for all of our stakeholders,” David J. Paterson, Verso president and chief executive officer, said in a company release.

The U.S. Bankruptcy Court for the District of Delaware confirmed Verso’s Chapter 11 plan of reorganization on June 23.

“Our emergence from bankruptcy less than six months after our Chapter 11 filings would not have been possible without the support of our lenders, whose willingness to invest in Verso demonstrates their confidence in our prospects for long-term growth and value creation,” Paterson said in the release. “We also appreciate the hard work and dedication of our employees, who continued to serve our customers without interruption throughout the restructuring process. Lastly, we thank our customers, vendors and other stakeholders for their loyalty. We believe Verso is poised for sustainable profitability, and we are excited about the opportunities that lie ahead.”

Verso’s restructuring reduced the company’s debt by $2.4 billion and includes $595 million in exit financing to support ongoing operations and capital investment, according to the release. The exit financing consists 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.

“Verso emerges from bankruptcy as a much stronger company with significantly reduced debt and a unified capital structure that position us to fully realize and leverage the benefits of our prior operational improvements, explore opportunities for strategic growth, successfully compete in the global marketplace, and deliver on our corporate mission to create value for all of our stakeholders,” according to Paterson.

As provided in Verso’s plan of reorganization, all shares of Verso’s common stock issued prior to the commencement of Verso’s bankruptcy proceeding were canceled upon emergence. Verso has issued new shares of common stock to the holders of its previously outstanding funded debt in return for their allowed claims against the company.

There is no majority stockholder, and no single entity owned more than 10 percent of Verso’s outstanding shares at the time of emergence, the release states.

In connection with its emergence, Verso also received approval from the New York Stock Exchange for Verso’s Class A common stock to be listed for trading on the NYSE. The Class A common stock will begin trading on the NYSE on Monday, July 18. The trading symbol for the Class A common stock is “VRS,” which is the same trading symbol for Verso’s common stock when it previously was listed on the NYSE.

In accordance with Verso’s Chapter 11 plan of reorganization, the term of Verso’s previous board of directors expired upon emergence and a new board of directors provided for in the plan of reorganization is effective immediately. As previously announced, Paterson will serve as chairman of the board and will remain as president and chief executive officer until his replacement is named.

The other directors of Verso are Robert M. Amen, Alan J. Carr, Eugene I. Davis, Jerome L. Goldman and Jay Shuster. Verso’s senior management team is unchanged and continues to lead the company.

“We’re very pleased to have completed Verso’s restructuring in less than six months from the time we filed our Chapter 11 petitions. By most accounts, this was remarkably fast,” Rowzie said. “The resulting $2.4 billion debt reduction will provide renewed opportunities to improve, invest in and profitably grow our business, and Verso is optimistic about the future.”

Verso’s Successful Emergence from Bankruptcy: Frequently Asked Questions available under emergence on verso.com.

How much was Verso’s debt reduced by the restructuring?

 Verso’s debt was reduced approximately $2.4 billion by the restructuring.

What are the key benefits of Verso’s restructuring?  

Verso emerges from bankruptcy as a much stronger company with significantly reduced debt and a unified, more manageable capital structure that position us to fully realize and leverage the benefits of our prior operational improvements, explore opportunities for strategic growth, successfully compete in the global marketplace and deliver on our corporate mission to create value for all of our stakeholders.

Upon emergence, did Verso receive financing to support ongoing operations and capital investment? 

Yes. Verso’s restructuring includes $595 million in exit financing to support ongoing operations and capital investment. The exit financing consists 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.

Is Verso’s plan of reorganization publicly available? 

Yes. Verso filed its confirmed plan of reorganization with the SEC on Form 8-K on June 24, 2016. You can find the 8-K on the investor page of our website, versoco.com, or on the SEC’s website, sec.gov.

Who owns Verso now and who is the majority shareholder?

Upon emergence, Verso’s funded debtholders became the owners of the company. There is no majority shareholder, and no single entity owned more than 10 percent of the company’s outstanding shares at the time of emergence. It was previously announced that Dave Paterson will be chairman of the board but will retire as president and CEO.

How will the new CEO be selected and when will the transition take place? 

Verso’s new board of directors, with advice and counsel from the new stockholders, will select Dave Paterson’s successor as president and CEO. A professional search firm has been hired to help identify potential candidates. The transition will take place as soon as is practicable after an offer for the position is made and accepted.

How many members are on Verso’s new board of directors? Who are they? 

Verso’s new board of directors has six members:  Robert M. Amen,  Alan J. Carr, Eugene I Davis, Jerome L. Goldman,  David J. Paterson (chairman), Jay Shuster

Will other members of Verso’s senior lead team remain with the company? 

Verso’s senior management team is unchanged and continues to lead the company.

How will emergence affect Verso’s day-to-day operations?

Verso will continue to operate its business as usual and our fundamental operating strategy remains unchanged. 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 and deliver the world-class products and services our customers have come to expect from us.

How do you know that Verso will be able to operate successfully in the future? 

Verso believes that our successful restructuring will provide new opportunities to build on our prior operational improvements and invest in our business in ways that will enhance our industry leadership. Verso is an operationally strong company. Our restructured balance sheet better aligns the company’s capital structure with our operations and positions Verso for long-term success.  Verso continues to seek opportunities to enhance our industry-leading position by building on prior operational improvements and leveraging the strength of our customer and supplier relationships. Our laser-like focus on safety at our facilities will help make Verso an employer and supplier of choice.  Using Verso’s Operational Excellence Model, we will continues to benchmark our operations against world-class standards, then develop and implement plans to close the realizable gap (R-gap) between the two. As part of this R-gap process, Verso has hundreds of projects – big and small – underway to continue to improve the efficiency and lower the cost of its operations. Aggressively executing these projects will be critical to Verso’s future success.  Verso continuously evaluates our operations to keep the supply of our products in balance with our customers’ demand for them.

Does Verso plan to further reduce production capacity as a result of the restructuring, either by permanently shutting down paper machines or closing an entire mill? 

Verso currently has no plans to close any of its mills as a direct result of the restructuring. Verso’s long-term success depends on the company’s ability to align its supply of products with our customers’ demand for them. We are continuously evaluating our business to assure that it operates as efficiently as possible and that the supply of our products remains in balance with our customers’ demand for them.

Source: verso.com


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