Verso Paper may file Chapter 11, sell mills

The four mills not mentioned as possible sales targets are “more closely aligned” to Verso’s business plan than the Duluth, Androscoggin and Stevens Point mills, Rowzie said.

Verso’s net sales of $782 million in the quarter were up 123 percent compared to the $350 million in net sales a year ago. It blamed sales declines on “an increase in offshore imports and a decline in U.S. demand for coated papers”.

“Our potential restructuring could occur in a consensual, out of court manner or through a court supervised Chapter 11 bankruptcy proceeding”, the company added.

Those options include talking with creditors about restructuring what the company owes and raising funds through selling mills.

Despite the acquisition of former rival NewPage, the paper company has lost $511 million over the past year.

After idling Wickliffe’s Verso Paper plant last week, laying off roughly 300 workers, corporate officials said they are considering bankruptcy and selling the Ballard County plant. The company is now traded in over-the-counter exchanges.

“Despite continuing soft market conditions, Verso saw seasonal volume increases in the third quarter, particularly in coated freesheet”, said Paterson, in a release.

Demand for North American coated paper declined by 4.7 percent in the first two quarters of 2015, following declines of 3.4 percent and 4.3 percent in 2014 and 2013, respectively.

There is also an oversupply of the paper products Verso produces. “Today’s announcement will not affect your day-to-day work, your paycheck or your benefits”, Paterson told employees at the Jay mill.

“As we move through this process, it’s really important that we don’t get distracted and lose sight of all the great things we’ve accomplished together over the last 11 months and how much opportunity lies ahead”, he wrote.