Key Highlights

  • Restructuring support agreements covering holders of more than 87% of the senior notes were signed on November 2, 2026, with a prepackaged Chapter 11 case planned in the Southern District of Texas.
  • Roughly USD 1.1 billion of senior notes would become equity, cutting senior note Debt about 88%, while existing holders would keep only about 8.5% of the new common stock.
  • Mercer skipped the October 1, 2026 coupon on its 12.875% senior notes due 2028, and a supplemental indenture dated October 30, 2026 stretched the grace window from 30 to 90 days.
  • A published quote placed the stock at USD 0.23, a gain of 8.26% on 10.393 million shares, with an undated snapshot. The 373.18% one-year EPS figure clashes with the company's reported losses.

Chapter 11 Plan Leaves Existing Holders With a Sliver

Mercer International (NASDAQ:MERC) told investors on November 2, 2026 that noteholders holding more than 87% of the senior notes had signed up to a restructuring. Roughly USD 1.1 billion of those notes would convert into equity, backed by a USD 400 million rights offering for fresh senior secured paper, fully underwritten by some noteholders. Other pieces: USD 325 million of convertible preferred shares, USD 150 million of takeback paper, and revolving Credit capacity of as much as USD 300 million. Management projects court approval roughly 45 days post-filing and a finish by year-end 2026, while Business keeps running as usual.

Pulp Losses Plus a Skipped Interest Payment and Nasdaq Notice

Mercer makes pulp, lumber and mass timber products. Second-quarter results released August 6 showed USD 460.3 million of revenue, with the loss at USD 1.13 per share, equal to USD 76.0 million, and negative USD 21.0 million of operating EBITDA including a USD 29.0 million non-cash inventory charge. Cash stood at USD 78.8 million, while the Equity line showed a USD 98.0 million shortfall. A separate Nasdaq bid-price letter came on July 9, 2026 after 30 business days under USD 1.00. A 180-day window would run to about January 5, 2027, by our own arithmetic from the notice date.

Penny Stock Mechanics: Cancelled Equity and Delisting Risk

Current equity is slated for cancellation on the plan's effective date. Noteholders would take about 91.5% of the new common shares, and legacy holders about 8.5%, before dilution from management incentives and preferred conversion. Management anticipates a Nasdaq delisting notice, and the stock could then trade over the counter. With shares this cheap, a few trades can move the quote, spreads may be wide and gains can reverse. The 373.18% EPS figure from the screen does not square with the losses reported, so it is set aside.

Where Things Stand

The company's debt load has become too heavy to carry as is, so it is swapping notes for equity. Mercer International (NASDAQ:MERC) missed an October 1, 2026 interest payment, carried a USD 98.0 million equity shortfall as of June 30 and continued losing money in pulp, which led to the November 2 agreement. If the plan is confirmed, existing holders would retain about 8.5% of the new common stock, and the company expects a Nasdaq delisting. Upcoming dated markers are the judicial sign-off, the exchange letter and the close of the extended grace window.