Verso Paper Corp. (fka VRSZQ)

[skizimus]

Verso Gets Final Court Approval on Bankruptcy Financing

4:29 pm ET March 1, 2016 (Dow Jones) Print




By Peg Brickley



Paper manufacturer Verso Corp. won final court approval of financing designed to ease an effort to eliminate $2.4 billion in debt in chapter 11 bankruptcy.

Loans designed to support both Verso and the former rival it acquired last year, NewPage, provide money for day-to-day operations and money to refinance existing loans attached to the company.

Early in its case, Verso, which filed for bankruptcy protection Jan. 26, won interim approval on financing that addressed its immediate liquidity needs. On Tuesday, Judge Kevin Gross indicated at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., that he would sign off on the financing package once final documents are prepared.

A turn to online channels for publishing and catalogs has hurt Verso's sales of coated paper, pushing the company into talks with senior creditors about reshaping its balance sheet for a tougher business climate.

Creditors wrangled changes in terms of the loans, which carry fees including an estimated $8.25 million for the agent and arranger banks. Paul Kizel, lawyer for Verso's official committee of unsecured creditors, said creditors hope the company can come up with a reorganization strategy that will allow it to exit bankruptcy as a going concern.

However, that reorganization shouldn't come at the expense of the most vulnerable creditors, including trade suppliers that Verso will need if its business is to continue, creditors contend.

Verso's chapter 11 exit outline calls for senior creditors to swap much of their debt for equity in a reorganized business. Junior creditors haven't yet been told what they will be offered under a bankruptcy reorganization plan.

Early in the case, Verso indicated it might be able to offer payment in full to unsecured creditors, which would tamp down the danger that unhappy trade creditors could upset the turnaround effort. However, bond trustees, the Pension Benefit Guaranty Corp., the United Steelworkers and three trade creditors lined up to form a panel to negotiate on behalf of unsecured creditors.

Memphis, Tenn.-based Verso pursued NewPage for years on the theory that combining the two businesses would make them stronger.



(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)



Write to Peg Brickley at [e-mail]



(END) Dow Jones Newswires

March 01, 2016 16:29 ET (21:29 GMT)

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