Marcal Paper Mills sets bid procedures for $121.6 million asset sale

By Caroline Salls

Pittsburgh, Nov. 6 - Marcal Paper Mills, Inc. has selected second-lien credit facility agent NexBank, SSB as the stalking horse bidder for the proposed sale of the company's assets, according to a Monday filing with the U.S. Bankruptcy Court for the District of New Jersey.

The total purchase price under the NexBank agreement would be $121.6 million, including a $35 million credit bid to account for the amount Marcal owes under the second-lien credit facility.

As previously reported, Marcal has decided to abandon its original plans to bring in $60 million of new investment and obtain $110 million in exit financing following an inability to meet some conditions in its previous proposal and because of credit market conditions.

Competing bids are due Dec. 12, and the auction will be held on Dec. 14, if necessary. The sale hearing is scheduled for Dec. 17.

Bids at auction must be for at least $500,000 more than the previous bid.

Marcal Paper Mills, an Elmwood Park, N.J., manufacturer and distributor of bath tissue, kitchen towels, napkins and facial tissue, filed for bankruptcy on Nov. 30, 2006. Its Chapter 11 case number is 06-21886.

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