The proposed reorganization hinges on a significant debt-for-equity swap. Mercer plans to exchange approximately $1.1 billion in senior notes for equity, a move projected to slash its existing senior note debt by 88%. This restructuring is designed to provide the necessary liquidity to navigate ongoing industry headwinds.

Under the terms of the agreement, existing shareholders will retain a stake in the reorganized entity. They are slated to receive 8.5% of the new common stock and 3.5% of the new convertible preferred stock. The company asserts that the support from its noteholders and shareholders is sufficient to ensure business continuity throughout the legal process.