NewPage Files Chapter 11 Bankruptcy in U.S., CCAA in Canada

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Separately, the company's Canadian subsidiary, NewPage Port Hawkesbury Corp., has brought proceedings before the Supreme Court of Nova Scotia under the Companies' Creditors Arrangement Act of Canada (CCAA). To maximize efficiency in both the U.S. and Canadian Court processes, NewPage Corp. and NewPage Port Hawkesbury Corp. have executed a Settlement and Transition Agreement, subject to approval by the Canadian Court.

Through the Chapter 11 process, NewPage expects to work closely with its creditors and other stakeholders in the U.S. to formulate a Chapter 11 plan that details how it intends to satisfy its liabilities and restructure its balance sheet to emerge as a financially stronger company. The company expects to continue operating its U.S. businesses as usual throughout this process with an undiminished focus on providing customers with high-quality paper and employees with a stable and safe working environment. To help ensure it has adequate liquidity to achieve these objectives and continue to operate and compete successfully throughout the restructuring, NewPage has obtained a commitment led by J.P. Morgan for up to $600 million in Debtor in Possession (DIP) financing.

Additionally, NewPage has filed a series of customary First Day Motions in the U.S. Bankruptcy Court that, subject to court approval, would allow it to continue its U.S. employee wages and benefits programs, honor obligations for customers served by its U.S. businesses, and provide additional protection to various other stakeholders. These motions are typical of the Chapter 11 process and are generally granted in the days immediately after a filing, the company notes.

"We strongly believe that the court-supervised restructuring we began today is the most effective means of strengthening our financial position and enhancing our standing as the leading producer of printing and specialty paper in North America," said George F. Martin, president and CEO of NewPage. "We expect to continue to provide our customers with the exceptional service and high-quality products they have come to expect. We recognize customers have choices, and NewPage needs to continue to earn their trust and loyalty every day. We expect to continue to run safe and efficient operations, be candid with all of our stakeholders, and act as a responsible community member both during and after our financial restructuring."

NewPage Port Hawkesbury Corp. brought proceedings before the Supreme Court of Nova Scotia in Halifax, Nova Scotia. The Canadian entity is in discussions with potential buyers and hopes to complete a successful sale of the mill while under the anticipated court protection.

On August 22, NewPage announced that it would take downtime at NewPage Port Hawkesbury Corp. due to market and economic conditions that had prevented it from profitably operating the mill for more than a year. NewPage Port Hawkesbury Corp. plans to use funds arising from its Settlement and Transition Agreement to continue a "hot idle" at the mill and preserve the value of its assets while it continues discussions with potential buyers.

The NewPage production portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint, and specialty papers. The company owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin, and Nova Scotia. These mills have a total annual production capacity of approximately 4.1 million tpy of paper, including 2.9 million tpy of coated paper, 1.0 million tpy of uncoated paper, and 200,000 tpy of specialty paper.