Verso Corporation (OTCQB: VRSZ) announced its financial results for the third quarter of 2015 yesterday. Among the topline highlights were:
- Net sales of $782 million in the third quarter of 2015 compared to $350 million in the third quarter of 2014
- Operating income before special items of $23 million in the third quarter of 2015 compared to $16 million in the third quarter of 2014
- Adjusted EBITDA of $84 million in the third quarter of 2015, compared to $41 million in the third quarter of 2014
However, of more interest to the distressed community was the following disclosure provided in the same news release:
Based on Verso’s current liquidity position and our projections of operating results and cash flows for the remainder of 2015 and 2016, we anticipate that we will not have sufficient resources to fund our most significant future cash obligations and, therefore, we believe that there is substantial doubt about our ability to continue as a going concern in the absence of a restructuring of our balance sheet. As a result of our cash flow and liquidity concerns, we have begun evaluating potential restructuring alternatives. We have engaged PJT Partners L.P. to provide us with restructuring and transactional services and O’Melveny & Myers LLP to provide us with restructuring legal advice and assistance. We have begun discussions with certain of our creditor constituencies to explore potential restructuring alternatives. We also are exploring opportunities to raise funds through potential sales of certain of our mills and related facilities, which may include the Stevens Point, Androscoggin and Duluth mills, our recently idled Wickliffe mill, and the hydroelectric generation facilities associated with our Androscoggin mill. Our potential restructuring could occur in a consensual, out-of-court manner or through a court-supervised Chapter 11 bankruptcy proceeding. While we intend to actively pursue a potential restructuring and potential asset sales, there can be no assurance that any of these activities will occur on terms acceptable to us or at all.
Verso is a leading North American producer of printing papers, specialty papers and pulp. The company’s printing papers are designed primarily for commercial printing, media and marketing applications, including magazines, catalogs, books, direct mail, corporate collateral and retail inserts, while its specialty papers are used primarily for label and converting, flexible packaging and technical paper applications.