Verso Considers Filing Bankruptcy, Sale of Duluth Plant
The struggling Verso Paper Corporation is considering filing bankruptcy and selling many of it’s paper mills, including the one in Duluth.
The company said in an earnings statement released Monday that net sales increased 123 percent to $782 million during the third quarter of 2015. They attributed the increase to the acquisition of NewPage.
Even though sales were up, the company took a $111 million hit for the quarter.
The company blames the loss on an increase in imports and a decline in U.S. demand for coated paper.
Verso said in the statement that “we believe that there is substantial doubt about our ability to continue as a going concern in the absence of a restructuring of our balance sheet.”
As of year’s end, September 30, the company has lost $511 million.
As a result, the company says they are “exploring opportunities to raise funds through potential sales of certain mills and related facilities- which may include the Steven’s Point, Androscoggin mill in Maine and Duluth Mills, our recently idled Wickliffe mill, and the hydroelectric generation facilities assosicated with the Androscoggin mill.”
According to Verso, the restructuring could result in a consensual, out-of-court manner or through a court-supervised Chapter 11 bankruptcy proceeding.
Verso spent $55 million in restructuring charges during the third quarter of 2015.
The Duluth Mill employs around 290 people and produces 270,000 tons of paper a year.
The Duluth mill was purchased by Verso in January as part of the NewPage acquisition.
It’s unknown if the potential sales would impact employees at the plant.
Verson said “While we intend to actively pursue a potential restructuring and potential asset sales, there can be no assurance that any of these activities will occur on terms acceptable to us or at all.”