Ongoing rumors of financial troubles for NewPage Corp., the largest manufacturer of coated paper in North America, became reality yesterday: Its parent company NewPage Group filed for Chapter 11 bankruptcy.
During the Chapter 11 process, NewPage plans to work closely with its creditors and other stakeholders in the U.S. to satisfy its liabilities and restructure its balance sheet to emerge as a financially stronger company, according to the filing in the U.S. Bankruptcy Court for the District of Delaware.
Business operations will continue uninterrupted throughout the Chapter 11 process. To ensure it has enough cash to achieve these objectives and continue operating and competing successfully throughout the restructuring, NewPage obtained a commitment led by J.P. Morgan for up to $600 million in debtor-in-possession financing.
What’s more, NewPage filed a series of motions in court that 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.
Based in Miamisburg, OH, NewPage Corp. recorded sales of $3.6 billion in 2010. The company recently announced the shutdown of its Port Hawkesbury mill in Nova Scotia, Canada, “based on current market and economic conditions.”
The mill’s downtime starts Sept. 10 for newsprint and Sept. 16 for the supercalendered machine. According to the Chapter 11 filing, NewPage Port Hawkesbury Corp. is trying to sell the Port Hawkesbury mill.