NewPage mulls possible Chapter 11 bankruptcy protection, restructuring, according to SEC filing, after credit downgrading by S&P, looming debt repayment in 2012
August 18, 2011
– NewPage Corp. said in documents filed this week with the U.S. Securities and Exchange Commission (SEC) that it is exploring "various restructuring alternatives," including possible Chapter 11 bankruptcy protection, the Wisconsin Rapids Tribune reported Aug. 18.
The company said in its latest quarterly report that it cannot assure shareholders it will be able to refinance its debt. In addition, on Tuesday, Standard & Poors Rating Services (S&P) downgraded NewPage's credit rating to CCC from CCC-plus on concerns about the Miamisburg, Ohio-based paper company's financial stability for the rest of 2011, it said in a news release.
S&P credit analyst Tobias Crabtree said in the release that the ratings downgrade followed NewPage's weaker-than-expected quarterly results. Another factor was the company's statement in the results that previously announced assets sales may not be completed, reported the Wisconsin Rapids Tribune.
It is well-known NewPage has debt due in 2012, said Cliff Bowers, a company spokesperson, who added the SEC documents were enough to explain the company's situation. Bowers said operations would continue as usual "before, during or after any restructuring."
NewPage reported a net loss in the second quarter of US$132 million but that loss was 24% smaller than in the same period a year earlier, the Wisconsin Rapids Tribune reported.
Among the assets NewPage was to sell are its Consolidated Water Power Co. transmission and distribution systems and its five hydroelectric facilities.
According to the company website, NewPage operates paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin, and Nova Scotia, and a research and development center in Biron, Wisconsin. The mills' annual production capacity total about 4.1 million tons of paper.
The primary source of this article is the Wisconsin Rapids Tribune, Wisconsin Rapids, Wisconsin, on Aug. 18, 2011.