Mercer International Weighs Chapter 11 Bankruptcy Filing

Mercer International Inc. is preparing for a potential Chapter 11 bankruptcy filing in Texas in the coming weeks. The Canadian pulp producer faces significant financial strain driven by persistent cash burn and rising costs for fiber and energy.

If the company proceeds with the filing, creditors are expected to take control of the organization. Redwood Capital Management, an opportunistic credit investor, has already emerged as one of the company's largest creditors by acquiring its distressed debt.

Financial indicators show a steep decline in the company's stability. As of June 30, Mercer held approximately US$1.3 billion in long-term debt. Its share price has fallen from US$1.98 at the end of 2025 to roughly 21 cents. The company is currently working with financial adviser Houlihan Lokey as it weighs the final decision on court protection.