NEW YORK -- Mercer International Inc. announced this week that, through a wholly-owned subsidiary, it has agreed to acquire all of the shareholder loans (aggregating approximately $48 million) and substantially all of the shares of the minority shareholder in its Stendal mill and other rights for €13.0 million ($17 million), of which €3.0 million ($4 million) will be paid in cash and €10.0 million ($13 million) will be payable by way of a one-year payment-in-kind note which can be paid in cash or shares of our common stock at our election.

Additionally, Mercer said it has successfully amended Stendal's senior project finance credit facility (approximately $499 million outstanding) and its amortizing term facility (approximately $18 million outstanding) to provide greater financial flexibility to Stendal by, among other things, loosening the financial covenant ratios Stendal must comply with and reducing scheduled principal repayments under the project finance credit facility by 50% while retaining its current "cash sweep". In connection with the amendment, Mercer made a capital investment of $20.0 million in Stendal.

"We are pleased with the transactions and believe that this acquisition of the additional interest in Stendal will provide us with enhanced operational and financial flexibility to build value for our shareholders," said Mr. Jimmy S.H. Lee, President and Chairman. "We are also pleased to have successfully amended the Stendal mill's credit facilities, which will provide it with greater financial flexibility."