Verso Corporation files for Chapter 11

The combination of falling domestic demand and increasing imports reduced the market for domestic suppliers by about 8 percent previous year, the company said, from shipments of about 16.2 million tons in 2014 to about 15 million tons in 2015. The company, which operates mills that produce printing and specialty papers and pulp, says the accompanying debt restructuring is “necessary to strengthen the company’s balance sheet and to position Verso for long-term success”.

“While filing for Chapter 11 protection was a hard decision, we are pleased that we enter this process with strong creditor support”, says Verso President and CEO David J. Paterson.

“Verso expects today’s announcement will have virtually no impact on the day-to-day operations of the company”, the company said in the release.

“I would leave all the important questions to Verso, but I’m confident after my discussion with the mill manager and representatives of Verso that I don’t see any potential immediate threat for the Stevens Point employees or the mill”. It reported that it has developed, in tandem with its creditors, a reorganizational plan that will eliminate $2.4 billion of its outstanding debt and enable Verso to exit Chapter 11 in a shorter timeframe. “For example, [Verso has] indefinitely idled an underperforming mill [in Wickliffe, Kentucky], and implemented operational improvements at other mills”, said Verso Chief Financial Officer Allen Campbell in a written statement to the bankruptcy court.

The company announced that it meant to restructure its debts.

Verso acquired NewPage Corp a year ago to increase its scale, but the company has said that merger-related savings were more than offset by rising prices for wood, falling prices for its products and competition from imports that benefit from a strong dollar.

The company owns a total of eight paper mills in the United States, scattered across the Midwest and Northeast.

Cash-strapped Verso has been selling assets after shuttering large swaths of its operations in ME and Kentucky, as demand for its products continues to decline.