Mercer International is a transatlantic pulp and solid-wood producer whose common equity has become a residual claim on a recapitalization rather than a claim on mid-cycle earnings. Management added going-concern language after reclassifying revolving credit as current, and a special committee is already in talks with holders of the two senior note issues. The market values that residual at about $25 million. The operating print is almost beside the point until those talks produce a capital structure that still leaves something for residual owners.
German fiber costs turned both segments cash-negative even as the cost program booked more savings. A non-cash inventory write-down of $29 million sat inside a negative operating-EBITDA print. Torgau is being cut from four shifts toward a smaller mill. Management sizes that turnaround as more than a $20 million earnings swing. Mass timber is the only growth pocket. The backlog remains north of $150 million and concentrated in data-center work.
Second-quarter revenue barely moved year over year. Cash ended the period near $79 million after another operating drain. The German leverage waiver expires at the end of September, and Nasdaq already sent a minimum-bid notice after thirty sessions under a dollar. Does a noteholder deal leave residual equity intact, or does the next cycle accrue only to the notes?