Verso Corporation has finalized a restructuring support agreement (RSA) with creditors holding at least a majority in principal amount of substantially all tranches of funded debt of Verso and its subsidiaries in connection with Verso’s filing for Chapter 11 protection in the U.S. Bankruptcy Court in the District of Delaware.

Verso has also finalized, subject to approval by the bankruptcy court, a debtor-in-possession financing package totaling up to $600 million which will provide a clear path to a restructuring that will benefit Verso’s stakeholders.

According to an 8-K filing, Citibank, as administrative agent; Citigroup Global Markets and Wells Fargo Bank as joint bookrunners and lead arrangers and Wells Fargo Bank as documentation agent entered into a superpriority secured DIP credit agreement, relating to an asset-backed credit facility in an aggregate principal amount of up to $100 million.

The Verso DIP facility includes a sub-facility for letters of credit in an aggregate amount of up to $50 million. Subject to the satisfaction of certain conditions to borrowing, loans under the facility will be available following entry of an interim order of the bankruptcy court authorizing the extensions of credit under the facility and the NewPage DIP facilities. The facility is being entered into for working capital and general corporate purposes, including to refinance indebtedness under Verso Holdings’ existing first lien asset-backed revolving credit agreement.

The RSA commits Verso and the signing creditors to pursue a consensual restructuring. Verso and the signing creditors have agreed to support and vote for a plan of reorganization as contemplated by the RSA and as otherwise reasonably satisfactory. Under the contemplated plan of reorganization, Verso will eliminate approximately $2.4 billion in pre-bankruptcy debt. In return, the holders of Verso’s funded debt will receive substantially all of the equity in the reorganized Verso. The DIP financing package will provide Verso with significant operational flexibility to successfully reorganize and sufficient liquidity to support its ongoing operations for the foreseeable future during the chapter 11 process.

“As we announced yesterday, filing for chapter 11 protection was a difficult decision for us. The strong creditor support we received in entering into the RSA and the fact that many of those same creditors participated as lenders in the DIP financing package are very gratifying. With the support of this broad spectrum of financial creditors, we anticipate that we will be able to enter into a restructuring plan designed to eliminate approximately $2.4 billion of our outstanding debt and to exit the chapter 11 process in a short timeframe. Upon completion of our plan, we will have a stronger balance sheet and operations that position us for long-term success,” said Verso president and CEO David J. Paterson.

Verso is a North American producer of printing and specialty papers and pulp.