CUMBERLAND, Maryland — In another sign that Verso Paper Corp. continues to face significant financial problems, the New York Stock Exchange suspended trading in the company’s stock on Monday after the share price dropped to 15 cents. Verso owns the Jay paper mill, which employs around 865 people and plans to lay off 300 within the year.
The NYSE has started proceedings to delist the stock from the exchange. That’s after NYSE determined that a trading price of 15 cents or less per share is abnormally low and is cause for suspension of trading and delisting, according to a news release from Verso.
Just weeks ago, the company announced plans to slash jobs at plants located in Kentucky and Maine to save costs. Verso idled its mill in Wickliffe, Kentucky, affecting about 310 workers and shutting down the No. 1 pulp dryer and No. 2 paper machine at its Androscoggin Mill in Jay, affecting about 300 workers.
Verso stock will continue to trade in over-the-counter markets. The company said the delisting is not related to business operations and does not constitute a default on Verso’s bonds or other credit agreements.
The NYSE said Verso will not be given a second chance.
“Verso also will not be allowed an opportunity to achieve future compliance with the NYSE’s continued listing standard requiring that the average share price of Verso’s common stock be at least $1.00 over a consecutive 30-trading-day period,” according to the news release.
When the mill shutdowns were announced, Verso said the “decision to reduce its production capacity was driven by several factors. North American coated paper demand is in … decline, down 4.7 percent in the first half of 2015, following declines of 3.4 percent and 4.3 percent in 2014 and 2013, respectively, according to the Pulp and Paper Products Council. The effects on U.S. producers have been made significantly worse by a change in the net trade balance due to the strengthening of the U.S. dollar relative to foreign currencies, which has resulted in increased foreign imports from Asia, Europe and Canada and decreased U.S. exports. In addition, high operating costs in Maine, especially high energy costs and local property taxes, were contributing factors.”
Verso took over the Luke mill in late 2014 as a result of a merger with NewPage Corp., which had recently emerged from bankruptcy.
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