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Verso, NewPage Can't Hammer Out Deal

July 6, 2012
MEMPHIS, TN—Verso Paper, based here, held discussions with certain holders of NewPage Corp. senior secured notes in an effort to achieve a potential business combination involving Verso and the Miamisburg, OH-based paper manufacturer as part of a consensual plan of reorganization in NewPage’s Chapter 11 bankruptcy proceedings. However, the two sides were unable to reach an accord.

In a release, NewPage stated that an ad hoc group of second-lien note holders presented an unsolicited proposal to combine NewPage and Verso Paper to an ad hoc group of first-lien note holders. "After thoroughly evaluating this proposal, NewPage determined that the combination posed significant downside risks to its stakeholders, employees and business," the release said.

According to Verso, the proposed transaction would have provided NewPage’s first-lien note holders with $1.425 billion of value, consisting of $1.075 billion in new Verso first-lien notes, $150 million in Verso common stock and $200 million in cash. The proposal included a 100 percent recovery in cash to repay NewPage’s debtor-in-possession financing, a 100 percent recovery in cash for the allowed priority and administrative claims in the bankruptcy proceedings, a to-be-determined amount of Verso common stock for the holders of NewPage’s second-lien notes, and a to-be-determined recovery for NewPage’s unsecured creditors.

 

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