NewPage chairman says company comfortable with liquidity without asset monetizations

By Jennifer Lanning Drey

Portland, Ore., Feb. 18 - NewPage Corp. remains optimistic that a portion of its planned $150 million of asset sales could be realized in the first half of 2010, but it is comfortable with its liquidity position regardless of the outcome of the sales based on recent business trends, Mark Suwyn, NewPage's chairman of the board, said Thursday during the company's fourth-quarter earnings conference call.

NewPage closed 2009 with $224 million of liquidity, consisting of $5 million of cash and cash equivalents and $219 million of additional borrowing capacity under its revolving credit facility.

The amount available under the revolving credit facility takes into consideration the company's requirement to maintain a minimum availability of $50 million through March 2011 that was added as part of a credit facility amendment in September.

"As we look at liquidity, we remain in a solid position," David Prystash, chief financial officer of NewPage, said during the call.

Regarding NewPage's asset sale monetization program, Prystash said the company remains on track and is likely to make announcements within the next two weeks.

Net debt increases

NewPage had net debt of $3.0 billion at Dec. 31, compared with net debt of $2.9 billion at the end of the fourth quarter of 2008. The increase was the result of additional borrowings drawn on the company's revolving credit facility and the effects of its debt refinancing in the third quarter of 2009, Prystash said.

Debt covenant EBITDA was $432 million in 2009, compared with $611 million in 2008.

Prystash said the decline was primarily the result of significantly lower sales volumes and lower average sales prices, partially offset by income from alternative fuel mixture tax credits, reductions in raw material costs and ongoing productivity improvements.

NewPage eliminated covenants tied to EBITDA in September.

When asked about the company's approach to its capital structure, Prystash said NewPage's primary focus is on managing the business and improving profitability and cash flow, but it will continue to evaluate capital-structure alternatives.

Net sales down by $120 million

NewPage reported fourth-quarter net sales of $857 million, compared with net sales of $977 million in the same period of 2008. Sales volume of coated paper improved during the fourth quarter but declined for the full-year 2009.

The decrease in net sales also reflected lower coated paper prices in the 2009 period, the company said.

NewPage posted a $55 million net loss attributable to the company in the fourth quarter, compared with a $42 million net loss in the 2008 period.

NewPage is a coated paper manufacturer based in Miamisburg, Ohio.

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