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NewPage Corp. Files for Bankruptcy Protection

September 9, 2011
MIAMISBURG, OH—The parent company of NewPage Corp. and some of its U.S. subsidiaries have filed for Chapter 11 bankruptcy in order to facilitate an orderly debt restructuring and position the overall business for long-term success. NewPage's product portfolio includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty paper.

NewPage Group and certain of its U.S. subsidiaries have commenced voluntary Chapter 11 cases, which are pending in the U.S. Bankruptcy Court for the District of Delaware. The company’s Consolidated Water Power subsidiary is not part of the filing.

Separately, the company’s Canadian subsidiary, NewPage Port Hawkesbury, has brought proceedings before the Supreme Court of Nova Scotia under the Companies’ Creditors Arrangement Act of Canada (CCAA). In order to maximize efficiency in both the U.S. and Canadian Court processes, NewPage and NewPage Port Hawkesbury have executed a Settlement and Transition Agreement, subject to approval by the Canadian Court.

Through the Chapter 11 process, NewPage expects to work closely with its creditors and other stakeholders in the U.S. to formulate a Chapter 11 plan that details how it intends to satisfy its liabilities and restructure its balance sheet to emerge as a financially stronger company. The company expects to continue operating its U.S. businesses as usual throughout this process.

To help ensure it has adequate liquidity to continue operating throughout the restructuring, NewPage has obtained a commitment led by J.P. Morgan for up to $600 million in Debtor in Possession (DIP) financing. Additionally, NewPage has filed a series of motions that, subject to court approval, would allow it to continue its U.S. employee wages and benefits programs, honor obligations for customers served by its U.S. businesses and provide additional protection to various other stakeholders. These motions are typical of the Chapter 11 process and are generally granted in the days immediately after a filing.

On Aug. 22, NewPage announced that it would take downtime at NewPage Port Hawkesbury due to market and economic conditions that had prevented it from profitably operating the mill for more than a year. NewPage Port Hawkesbury plans to use funds arising from its Settlement and Transition Agreement to continue a “hot idle” at the mill and preserve the value of its assets while it continues discussions with potential buyers.
 

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