Archive for January, 2011

Tuesday, January 18, 2011

The owners of North America’s two largest makers of coated paper are discussing a deal that could result in one of them having a significant ownership stake in both manufacturers, according to a published report. NewPage’s owner, Cerberus, and Apollo Management, which has a controlling interest in #2 maker Verso Paper, are discussing what to do about NewPage’s high levels of debt, PPI Pulp & Paper Week reported recently. Apollo is also the largest holder of #1 NewPage’s $800 million second-lien bonds, the publication said. “One mutually beneficial scenario could see Cerberus retaining a diluted equity stake by sharing ownership… with Apollo through debt equitization,” the publication said. “Debt equitization” means debt held by Apollo would be converted to an ownership stake.
Apollo’s apparent “loan to own” intentions for NewPage came to light early last year when it and two other hedge funds snapped up more than 50% of the second-lien bonds, apparently under the assumption that NewPage’s inability to make debt payments would eventually give them control of the company.
Magazine publishers, printers, catalog companies, and other major buyers of coated paper would certainly cry foul if two companies controlling more than half of the continent’s coated paper capacity tried to merge. But it’s not clear whether Apollo would trigger any antitrust alarms if it obtained a sizable equity stake in NewPage by swapping debt for equity.
Analysts and industry executives have touted consolidation as the path to reasonable profitability for paper manufacturers. The tactic has worked well in the North American uncoated freesheet market but not so well in the newsprint market. UPM is trying it in the European coated and supercalendered markets with its proposed purchase of Myllykoski.

After reading this article below, I was not sure I wanted to scream or laugh…or pick up the phone and ask Rep. Corrine Brown if I could have the job of adding Constitutional citations to bills, and I would ONLY charge her $285,000! I would save the taxpayers 50% ! Seriously, this is just another example of our beloved leaders being clueless and downright ignorant of what things cost. In the printing industry, no customer in their right mind would pay $570,000 for 3 or 5 lines of copy per job. In this economic climate, I would do it for free to get the job. And then to claim that there are extra delivery fees ? What ?? Politics and printing have been mixing for centuries….but ask Ben Franklin how much he would pay to set 4 or 5 lines of copy – I bet you he could tell you, which is the difference between the elitist politicians of today and one of our beloved Pennsylvanians: a firm grip on reality, unabashed honesty and the love of country.

Democratic Rep. Corrine Brown said a GOP requirement that lawmakers cite the Constitution in each bill they introduce will cost $570,000 in additional printing costs.The Florida Democrat, who is in her ninth term in Congress, said the extra costs are attributed to “supplies, labor and delivery.”
Democrats have complained about the new House GOP rule, which requires all legislation to include a citation to language in the Constitution that authorizes any bill they introduce. Democrats see the new requirement as an unveiled accusation that the last Congress exceeded its constitutional authority. Brown’s argument seems designed to appeal to Republicans. She argues the new rule will cost hundreds of thousands of dollars in Congressional Record printing costs to be paid for by taxpayers. In her extension of remarks attached to the January 7 Congressional Record, Brown said the Republican rule only requires a “perfunctory statement without explanation,” which lessens the value of including the statement in each bill. “Committees need not consider the statement, no Member will ever vote on it, and Senate bills can be considered without one,” she said. Brown reiterated other Democratic arguments against the new rule, including that it is the job of the courts to decide when Congress has overstepped its bounds.
Democrat: Citing Constitution will cost taxpayers $570K By Pete Kasperowicz – 01/10/11 12:07 PM ET