SP Newsprint Files for Bankruptcy Protection

SP Newsprint Holdings LLC, Greenwich, Ct., and its subsidiaries SP Newsprint Co., SP Recycling Corp. and SEP Technologies L.L.C , have filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In a statement, the company says that it intends to use the bankruptcy process to explore options to continue its business as a going concern.

"As a result of weak economic conditions, coupled with record prices for key raw materials, the company's profit margins have been reduced to levels that are not able to support servicing of current outstanding debt. Therefore, the company is seeking court protection to maximize going concern value in an orderly manner," says Ed Sherrick, SP Newsprint’s CFO.

The company is in the process of negotiating debtor-in-possession (DIP) financing with certain of its lenders and agreed upon use of cash collateral in the interim, which is expected to provide liquidity during the restructuring process. In connection with the filings, the company is requesting customary relief to support its customers and employees as the company explores its options.