MEMPHIS, Tenn. (AP) — Paper company Verso Corp. said Tuesday that it has filed for Chapter 11 bankruptcy protection, though the company says the move will have virtually no impact on its daily business.
Memphis-based Verso said the bankruptcy filing is intended to help the company restructure debt. Verso President and CEO David J. Paterson said in a statement that the plan is to eliminate $2.4 billion of outstanding debt, and the reorganization would result in the holders of its funded debt receiving Verso equity.
Verso also expects to finalize a debtor-in-possession financing package totaling up to $600 million, in a move designed to help pay for its daily operations as it reorganizes.
Since Verso acquired NewPage Holdings Inc. in January 2015, factors including an accelerated decrease in demand for its products and an increase in foreign imports "made it apparent that action was needed," Paterson said.
"Verso chose to take this proactive step with the firm belief that our company will emerge from the Chapter 11 process as a stronger company that is positioned to compete and win, even as challenges in the overall economic environment continue," Paterson said.
Verso, which is backed by private equity firm Apollo Global Management LLC, makes printing and specialty papers for catalogs, magazines, books, direct mail and other uses.
According to its website, Verso has mills in Maine, Maryland, Michigan, Minnesota and Wisconsin. Verso says it does not expect to close any mills, though it will "continue to evaluate its mills to ensure that they are operating as efficiently as possible."
Verso has indefinitely shut down its mill in Wickliffe, Kentucky. The company closed its mill in Bucksport, Maine in 2014, eliminating 500 jobs. Verso also cut 300 jobs at its mill in Jay, Maine, last year.