Verso Coporation has entered Chapter 11 bankruptcy proceedings. The company is struggling with declining demand for its products and financial difficulties as a result.
US pulp and paper producer Verso Corporation is in financial difficulties. The company announced that, together with its subsidiaries, it had filed voluntary petitions with the Bankruptcy Court in the district of Delaware to reorganise under Chapter 11 of the US Bankruptcy Code. Verso expects that the measure will have virtually no impact on its daily business.
The company announced that it intended to restructure its debts. "We [...] plan to eliminate $2.4bn of our outstanding debt and to exit the Chapter 11 process in a short timeframe," said Verso President and CEO David J. Paterson. The company also expects to finalise a debtor-in-possession (DIP) financing package totaling up to $600m that will provide it sufficient liquidity to support its ongoing operations for the foreseeable future during the Chapter 11 process.
The company explained that since Verso acquired New Page Holdings in January 2015, a confluence of external factors, including an accelerated and unprecedented decline in demand for its products, a significant increase in foreign imports resulting from a strong US dollar relative to foreign currencies, and Verso's impending financial obligations made it apparent that action was needed.
Verso is a producer of printing paper for magazines, books or retail inserts, amongst others, of specialty papers used primarily for label and converting, flexibel packaging and technical paper applications, as well as pulp. Since the takeover of its competitor New Page in early 2015, the company is considered the biggest supplier of coated paper in the North American market. It operates eigh mills with a total capacity of 3.26 million t (3.6 million sh.t).