Verso and subsidiaries emerge from bankruptcy

By Sheri Kasprzak

New York, July 15 – Verso Corp. and its subsidiaries have emerged from bankruptcy after a financial restructuring and the confirmation of its Chapter 11 plan of reorganization by the U.S. Bankruptcy Court for the District of Delaware, said a Verso statement released Friday.

The restructuring plan reduced the company’s debt by $2.4 billion and includes $595 million in exit financing to support ongoing operations and capital investment. The exist financing includes an asset-based lending facility with borrowing capacity of up to $375 million led by Wells Fargo Bank, NA and a $220 million term loan facility with available loan proceeds led by Barclays Bank plc.

Creditor treatment

Treatment of creditors under the plan will include the following:

• Verso and NewPage ABL debtor-in-possession loans will be refinanced through an exit ABL loan;

• NewPage term DIP loan claims will be paid in full in cash. NewPage roll-up DIP term loan claims will be treated as class N3 claims. As class N3 creditors, holders will receive a portion of the NewPage plan consideration equal to the allowed amount of the holder’s claim on the plan confirmation date;

• Administrative claims, priority tax claims and other-priority claims will be paid in full in cash;

• Other secured claims will be reinstated, holders will be paid in full in cash or receive the collateral securing the claims;

• Holders of Verso first-lien claims will receive a share of 50% of the equity consideration and 100% of new seven-year warrants to purchase 5% of the reorganized company’s equity with a strike price of $1.04 billion;

• Holders of Verso senior debt claims will receive a share of 2.85% of the equity consideration;

• Holders of Verso subordinated debt claims will receive a share of 0.15% of the equity consideration;

• Holders of general unsecured claims will receive a share of $3 million in cash;

• Verso intercompany claims will be either reinstated or canceled, extinguished and discharged, at the option of the debtors;

• Holders of the equity interests in Verso subsidiaries will be either reinstated, transferred to reorganized Verso or canceled, extinguished and discharged;

• Holders of equity interests in Verso Corp. will receive no distribution; and

• Holders of NewPage first-lien claims will receive a share of the NewPage plan consideration remaining after distribution to holders of the roll-up DIP term loan claims.

New shares issued

Additionally, Verso’s plan of reorganization includes newly issued shares after all of Verso’s common shares were canceled. Connected with the emergence, Verso’s common stock will be listed on the New York Stock Exchange under the trading symbol VRS.

“Our emergence from bankruptcy less than six months after our Chapter 11 filings would not have been possible without the support of our lenders, whose willingness to invest in Verso demonstrates their confidence in our prospects for long-term growth and value creation,” said David J. Paterson, Verso’s president and chief executive officer, in a statement.

“We also appreciate the hard work and dedication of our employees, who continued to serve our customers without interruption throughout the restructuring process. Lastly, we thank our customers, vendors and other stakeholders for their loyalty. We believe Verso is poised for sustainable profitability and we are excited about the opportunities that lie ahead.”

Based in Memphis, Verso produces printing and specialty papers and pulp. The company filed for bankruptcy on Jan. 26 under Chapter 11 case number 16-10163.

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