NewPage announced today it has filed for Chapter 11 bankruptcy protection, will keep its U.S. mills operating, and is seeking a buyer for its Canadian mill.
North America's largest maker of magazine-quality paper says it has $600 million from J.P. Morgan in "debtor in possession" financing that will enable it to continue operating while it tries to restructure its approximately $4 billion in debt and other liabilities.
The company was already in the process of putting its Port Hawkesbury, Nova Scotia mill on indefinite shutdown. Today's announcement says the company will "continue a 'hot idle' at the mill and preserve the value of its assets while it continues discussions with potential buyers."
The company's bankruptcy court filing today blames NewPage's problems on declining demand for paper in North America, "foreign imports from Europe and Asia," "the rising cost of raw materials", and the company's "relatively high level of structured debt". The filing notes that NewPage has been able to generate positive EBITDA (operating cash flow), but that money is insufficient to repay its huge debt load.
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