PORTLAND, Maine — Jay mill owner Verso Corp. has emerged from Chapter 11 bankruptcy, restructuring to take $2.4 billion in debt off its balance sheet in a deal that gives equity in the new company to past holders of that debt.
David Paterson, the company’s president and CEO, said the company’s six-month bankruptcy restructuring “would not have been possible without the support of our lenders, whose willingness to invest in Verso demonstrates their confidence in our prospects for long-term growth and value creation.”
In a written statement Friday, Paterson also thanked the company’s employees, who he said “continued to serve our customers without interruption throughout the restructuring process.”
The company employs about 560 people at its Androscoggin mill in Jay, where the company has recently announced it will make a number of new packaging papers for food and medical applications.
Through the bankruptcy reorganization, the company was allowed to reject a supply contract with the Wisconsin-based Expera Specialty Solutions on the Jay mill’s No. 5 paper machine. Expera used that machine to make packaging papers similar to those Jay will now produce itself.
The initial launch of those products from Verso prompted a trademark lawsuit from Expera, which argued the initial name GlazeGuard was too similar to its product sold under the name “Grease-Gard.”
A Verso representative said the reorganization plan means no material changes to its wages and salaries, benefits or union contracts. The mill’s workforce has held relatively steady since layoffs of about 300 workers late last year.
The centerpiece of the restructuring converted $2.4 billion in debt into equity in the new company, which borrowed heavily to buy its larger competitor NewPage for $1.4 billion in January 2015.
Verso also secured $595 million in financing to support operations and capital investments to emerge from bankruptcy.
Paterson said in a statement that the company exits bankruptcy in a stronger position, primarily from a reduced debt load. The company said it also has no majority shareholder upon exiting bankruptcy, as no single entity owned more than 10 percent of its outstanding shares.
The company’s Class A stock will resume trading on the New York Stock Exchange on July 18, under the symbol VRS.