The company that owns the pulp mill in Castlegar has pulled the trigger on filing for US bankruptcy protection. The move had been rumoured for a few weeks.
In a news release today, Mercer International said it would “continue to operate in the ordinary course of business: customers will continue to be served, vendors and unsecured claims will be paid in the ordinary course, and employee wages and benefits will continue without interruption.”
Mercer said the move comes as part of a restructuring that is expected to “significantly reduce” Mercer’s debt.
“With the support of the majority of our noteholders and shareholders, we are putting in place a much stronger balance sheet and the liquidity to navigate current pulp and lumber market and geopolitical conditions,” CEO Juan Carlos Bueno said in a prepared statement.
“Upon emergence, we will be better positioned to invest in, and grow, our business. This is a balance sheet recapitalization only. Our mills in Germany, Canada and the United States are operating as usual, and we expect to continue to meet our commitments to customers, suppliers and employees in the ordinary course.”
Mercer and a non-operating US subsidiary known as Mercer International (Texas) LLC will enter voluntary Chapter 11 bankrupctcy protection in Texas.
Mercer has reported net losses of $128 million in the first half of this year. The company’s share price stood at 21 cents US on Wednesday, down from about $2 at the end of 2025. A third-quarter earnings report is due Thursday.
Earlier this year, the City of Castlegar granted Celgar an extension to the end of 2026 to pay its property tax bill. Celgar temporarily closed its log yard and woodroom in July due to poor markets, sidelining 21 employees.
The Castlegar mill, which normally employs about 400 people, has experienced financial difficulty before. In 1998, under a previous owner, it was placed in receivership. Although the mill reopened, it remained under the control of a receiver until Mercer bought it in 2005.
