Paper producer NewPage Corp. said Wednesday that it is seeking Chapter 11 bankruptcy court protection while it restructures.
The privately held Ohio-based company said it expects to continue operating its U.S. business as usual and has commitments for $600 million in financing led by J.P. Morgan Chase. A statement from NewPage's Miamisburg, Ohio, headquarters says it expects to emerge as a financially stronger company.
"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," George F. Martin, president and CEO, said in a statement.
The company said it has some 350 southwest Ohio employees and 6,980 total, including Canada. Most employees are represented by the United Steelworkers union, which said Wednesday it wants to be actively involved in the reorganization and will seek a seat on the creditors' committee.
"The USW is not surprised by this announcement, as the union has been closely monitoring the performance of the company for the past year," Jon Geenen, a USW international vice president, said in a statement. He said the union wants to be involved to protect the interests of workers and retirees.
The company makes coated paper used in magazines and catalogs and also uncoated and specialty paper. It has been hurt by rising raw materials costs and lower demand for paper because of a decline in advertising and the weak economy. At the end of last year, NewPage reported more than $3 billion in debts. For the year, it recorded a net loss of $656 million and $3.6 billion in revenue.
The company said it has filed its petition in federal bankruptcy court in Delaware.
Its website lists paper mills or other operations in Biron, Stevens Point and Wisconsin Rapids, Wis.; Escanaba, Mich.; Duluth, Minn.; Rumford, Maine; Luke, Md.; Wickliffe, Ky., and Port Hawkesbury in Nova Scotia, Canada. The company says it hopes to sell the Port Hawkesbury mill.