Verso's Plan of Reorganization Confirmed by Bankruptcy Court

Verso Corp., Memphis, Tenn., USA, this past week completed another important step toward its emergence from bankruptcy when its Chapter 11 plan of reorganization was confirmed by the U.S. Bankruptcy Court in the District of Delaware. This confirmation, which comes less than five months after Verso and its subsidiaries filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code, clears the way for Verso to emerge from bankruptcy, likely by the end of July.

"Verso is extremely pleased with this speedy and successful outcome," said Verso President and CEO David J. Paterson. "Our smooth path through this critical step in the restructuring process would not have been possible without the strong support of our funded debtholders and the Official Unsecured Creditors Committee and the affirmative vote on our plan of reorganization by our creditors. Their confidence in Verso's prospects for long-term value creation sets the stage as we chart our course to a sustainable financial future."

Verso's restructuring will reduce the company's debt by approximately $2.4 billion upon emergence. Verso expects to emerge from bankruptcy with $595 million in exit financing to support ongoing operations and capital investments. The exit financing will consist of an asset-based lending facility with borrowing capacity of up to $375 million led by Wells Fargo Bank, National Association, and a $220 million term loan facility with available loan proceeds of $198 million led by Barclays Bank PLC.

With the overwhelming support of all classes of creditors entitled to vote on the plan, Verso will emerge from bankruptcy with a unified, highly de-levered capital structure that will position the company to successfully adapt and compete in the dynamic global marketplace, even as challenges in the overall economic environment continue. The confirmed plan of reorganization requires no material changes in the ordinary course of business to Verso's wages and salaries, benefits, pension plans, or collective bargaining agreements.

"Verso's restructuring will not change our fundamental operating strategy," Paterson said. "With an unwavering commitment to ethical business practices and transparency, we will continue to improve safety, efficiency, and operational flexibility at our facilities, reduce costs across the organization, and deliver the world-class products and services our customers have come to expect from us.

"In addition, we anticipate that our unified, highly de-levered capital structure will allow us to make investments in Verso's business that will help mitigate the continuing decline in the demand for coated paper products, to explore strategic opportunities that enable profitable growth, and to create value for all of our stakeholders," Paterson explained. "We believe that Verso is poised for sustainable profitability, and we are excited about the opportunities ahead." 

PJT Partners L.P. provided restructuring and transactional services and O'Melveny & Myers LLP provided restructuring legal advice and assistance to Verso throughout its restructuring.