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Mercer launches exchange offer for $67.3 million 8.5% convertibles
By Jennifer Chiou
New York, July 13 - Mercer International Inc. announced the start of an exchange offer for any and all of its $67.3 million of 8.5% senior subordinated convertible notes due 2010.
In exchange for each $1,000 principal amount of notes, the company is offering:
• 129 shares of Mercer common stock; plus
• A premium of $200 of Mercer's new 3% convertible senior subordinated notes due October 2012; and
• Accrued interest.
Currently the notes are convertible at a rate of 129 shares per $1,000 principal amount, or a conversion price of $7.75 per share.
The company said that the new notes will be substantially the same as the old notes, but will accrue interest at a rate of 3% per year and will be convertible into Mercer common stock at a conversion price of $2.75 per share.
The offer ends at 5 p.m. ET on Aug. 11.
"The exchange offer provides us with the opportunity to retire a significant portion of our long-term debt early and reduce our debt obligations and annual interest expense," Jimmy S.H. Lee, president and chairman, said in a news release.
"While the amount of the debt and interest expense reductions will be dependent upon the level of participation by holders, we expect that the transaction will strengthen our overall capital structure."
Georgeson Inc. is the information agent (800 267-4403).
Mercer International is a pulp manufacturing company based in Seattle.
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