Mercer International to Invest $20 Million in Stendal Mill
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Mercer International Inc., New York, N.Y., USA, this week announced that its Stendal facility in Germany has successfully amended its senior project finance credit facility (approximately EUR 413 million outstanding) and its EUR 17.0 million amortizing term facility in respect of Project Blue Mill (approximately EUR 15 million outstanding). The amendment agreement modifies the Stendal facilities to provide the Stendal mill greater financial flexibility by, among other things:
- Waiving compliance with the annual debt service cover ratio and the senior debt to EBITDA cover ratio under the Stendal Facilities until and including Dec. 31, 2013
- Amending the same so that the financial covenants now deduct from senior debt cash in the debt service reserve account and cash above a stipulated threshold to include certain cash reserves in the calculation of senior debt
- Providing that a failure to satisfy the covenant to maintain an annual debt service cover ratio under the Stendal Facilities would only be an event of default when amounts in the debt service reserve account plus certain cash reserves are below a specified threshold
- Revising the calculation of amounts required to cure financial covenant defaults under the Stendal Facilities.
In connection with the amendment agreement, the company made a capital investment of $20.0 million in Stendal.
"We are pleased to have successfully amended and improved the covenants in our Stendal mill credit facilities, which will provide our Stendal mill with greater flexibility," said Jimmy Lee, president and chairman. "We are pleased with the continued support of our lenders."
The Stendal mill is a single-line NBSK (northern bleached softwood kraft) pulp mill situated near the town of Stendal, Germany, with an annual pulp production capacity of approximately 650,000 air dried metric tpy.
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