Mercer will sell nearly all of its assets in British Columbia and Arkansas for $60m. Credit: Ernesta Vala on Unsplash.

North American manufacturer Structurlam Mass Timber and three affiliates have filed a voluntary petition for relief under Chapter 11 of the US bankruptcy code.

Based in Canada, Structurlam Mass Timber will sell nearly all of its assets in British Columbia and Arkansas for $60m as part of a stalking horse asset purchase agreement (APA) with Mercer International.

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Mercer is a pulp manufacturing company with production facilities in Germany and Canada, as well as Seattle, Washington.

The Supreme Court of British Columbia will soon grant a request for recognition of the Chapter 11 proceedings.

As part of a court-monitored auction procedure, the APA is subject to higher and superior bids.

The Bank of Montreal has offered a C$7.5m debtor-in-possession (DIP) finance to the company to support its activities during the legal proceedings.

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In January 2023, Structurlam temporarily suspended operations at its plant in Conway, Arkansas, following a customer contract cancellation.

The suspension also led to reducing staff at the facility.

Structurlam Mass Timber CEO Matthew Karmel said: “I am delighted and grateful for Mercer’s vote of confidence in Structurlam and in its leadership in the mass timber industry.

“It is especially rewarding given the difficult period the company has had since suspending its operations in Arkansas mid-January, and it will help in normalising the plant operations going forward.”

Stifel / Miller Buckfire is acting as the investment banker and advising Structurlam in relation to the agreement.