Mercer International Details $1.275 Billion Debt Restructuring and Q3 Results

Mercer International Inc. (Nasdaq: MERC) reported third quarter 2026 results and reiterated a planned balance sheet restructuring in an 8-K filed Thursday, Nov. 5, 2026. The filing attaches a press release that covers the quarter and the recapitalization agreements the company entered into on Nov. 2. The company said it expects to commence voluntary prepackaged chapter 11 cases to carry out the recapitalization. Our Nov. 3 report, Mercer International Agrees to Debt-for-Equity Restructuring Through Chapter 11, covers that agreement.

Restructuring terms

The company said it has restructuring support agreements with holders of more than 87% of the aggregate principal amount of its 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029, as well as holders of a majority of its common shares. The plan would exchange about $1.1 billion of existing senior notes for equity, eliminate about $96 million of annual cash interest on the senior notes, and provide $400 million of new capital through a fully backstopped rights offering of senior secured notes. The restructuring addresses $1.275 billion of outstanding senior notes.

The company said the Recapitalization is being implemented through the parent, Mercer International Inc., and Mercer International (Texas) LLC, a non-operating subsidiary. It expects to commence voluntary prepackaged chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. Completion is subject to customary conditions, including any requisite regulatory approvals, and the company said it is optimistic the process can conclude by the end of 2026.

Scale of the debt

At Sept. 30, 2026, Mercer had cash and cash equivalents of $71.0 million and total aggregate liquidity of about $143.5 million, after a previously announced €70 million reduction in its German revolving credit facility. Total shareholders' deficit was $158.2 million, compared with equity of $68.1 million at Dec. 31, 2025. Current debt rose to $354.7 million from $13.7 million.

Third quarter results

Revenue fell about 4% to $440.7 million from $458.1 million a year earlier. Operating EBITDA was negative $2.9 million, compared with negative $28.1 million in the third quarter of 2025. The net loss narrowed to $59.2 million, or $0.88 a share, from $80.8 million, or $1.21 a share. The company recorded an $8.0 million non-cash inventory impairment, against $20.4 million a year earlier.

The company said it received about $13.0 million in grants and up to $13.5 million in low-interest repayable contributions for its Peace River mill. Its cost reduction program, which it calls One Goal One Hundred, produced $22.0 million of savings in the quarter and about $76.0 million since April 2025, and it remains on track for $100 million by year end.

The press release said planned maintenance downtime at its pulp mills cut Operating EBITDA by about $34.1 million in the quarter. It also said the Rosenthal mill was idled for 24 days of unplanned downtime in the fourth quarter after an effluent treatment issue during startup.

The company said an earnings call is scheduled for Nov. 6, 2026, at 10:00 a.m. ET.