2/26/2013

Just two months out of bankruptcy, NewPage Corp., which owns a paper mill and recycling plant in Duluth, is cutting its staff by five percent, affecting 300 people nationwide.

In Duluth, that amounts to approximately 15 positions based on the employment level NewPage provided to BusinessNorth in December. When contacted Tuesday, Communications Coordinator Matt Christenson said he did not have specific numbers at hand. He attributed the reduction to declining paper demand.

The paper manufacturer emerged from Chapter 11 bankruptcy protection Dec. 14. As part of its restructuring plan, NewPage received exit financing in the form of a $500 million term loan from Goldman Sachs Lending Partners and a $350 million revolving credit loan through J.P. Morgan Securities. Prior to seeking bankruptcy court protection, NewPage’s liabilities exceeded assets by $2.5 billion.

Compensation and benefit plans weren’t changed as a result of the restructuring. The court discharged all claims and equity interests against the company.

“Through the reorganization process, we significantly reduced our debt and emerged with a sustainable capital structure. Our exit facility will provide ample liquidity to meet all of our working capital and capital investment needs,” Jay A. Epstein, senior vice president and chief financial officer, said in the company’s announcement.

The latest available financial results for NewPage reported the paper-maker’s third-quarter and nine-month performance. The company had a $47 million quarterly loss versus a $126 million loss for the third quarter of 2011. Year-to-date, NewPage lost $149 million through Sept. 30 compared with a loss of $343 million the prior year.

The firm operates mills in eight U.S. cities. The former holding company is being dissolved and replaced by a newly created entity.

NewPage manufactures super-calendered paper at its Duluth mill. Built in 1987, it is the firm’s newest facility, although it has a lower capacity than six others.

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