Mercer Weighs Chapter 11 After Missing $25.8 Million Interest Payment

Mercer International Inc. may pursue Chapter 11 protection as it works on a debt restructuring, following an unpaid interest bill of approximately $25.8 million on its 2028 notes.

The unpaid interest was due Oct. 1 on Mercer’s 12.875% senior notes due in 2028. Mercer elected to use the notes’ 30-day grace period, which does not itself trigger a default under the indenture. The company’s pulp and lumber businesses and mass timber operations stayed active, while customer support and payments to employees, suppliers and contractors continued normally.

Mercer is in advanced talks with holders of more than 75% of the combined outstanding principal on its senior notes due in 2028 and 2029. The discussions center on a recapitalization and capital infusion to address debt maturities, improve liquidity and reduce funded debt and interest costs, but may not produce a definitive agreement.

Mercer had $78.8 million in cash and cash equivalents as of June 30. In the first half of 2026, it recorded a $128 million net loss and used $100.8 million in cash for operating activities.

Mercer faces substantial doubt about its ability to continue as a going concern for one year after its June-quarter filing was issued. Its Canadian credit facility matures in January 2027, and Mercer does not expect to generate enough cash to repay it without refinancing or another funding source.