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<TITLE>Filed by Bowne Pure Compliance</TITLE>
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<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT
style="font-size: 12pt">Washington, D.C. 20549 </FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest event reported): February 4, 2009</B>



<P style="font-size: 24pt" align="center"><B>MERCER INTERNATIONAL INC.<BR>
</B><FONT style="font-size: 10pt">(Exact
name of registrant as specified in its charter) </FONT>
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  <TD style="border-bottom: #000000 1px solid"><B>Washington</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>000-51826</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>47-0956945</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
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  <TD style="border-bottom: #000000 1px solid"><B>Suite 2840, 650 West Georgia Street,<BR>Vancouver, British Columbia,
Canada<BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>V6B 4N8</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
 </TR>

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<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number, including area code: <B>(604)
684-1099</B>
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 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))<BR>



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<P style="display: none; font-size: 10pt" align="center">1
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<P style="font-size: 10pt" align="justify"><B>ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT</B>

<P style="font-size: 10pt" align="justify">On February&nbsp;4, 2009, Mercer International Inc.&#8217;s (the
&#8220;Company&#8221;) 70% owned subsidiary, Zellstoff Stendal GmbH (&#8220;ZSG&#8221;), the owner and operator of the
Stendal mill, completed an agreement (the &#8220;Amendment&#8221;) with its lending syndicate (the
&#8220;Lenders&#8221;) to amend the project financing facility agreement (the &#8220;Facility Agreement&#8221;) dated
August&nbsp;26, 2002 governing the project loan facility established for the construction and operation of the Stendal
mill.

<P style="font-size: 10pt" align="justify">The description below is a summary of the terms of the Amendment. It does
not purport to be complete and is qualified in its entirety by the complete text of the Amendment itself, which will be
filed as an exhibit to the Company&#8217;s annual report on Form 10-K for the period ended December&nbsp;31, 2008.

<P style="font-size: 10pt" align="justify"><B>Deferral of Principal Payments</B>

<P style="font-size: 10pt" align="justify">The Amendment revises the repayment schedule of principal payments due by
deferring <FONT face="'Times New Roman',times,serif">&#8364;</FONT>164.0&nbsp;million of scheduled principal payments
(the &#8220;Deferred Amount&#8221;) until the Facility Agreement&#8217;s maturity on September&nbsp;30, 2017
(&#8220;Maturity&#8221;).

<P style="font-size: 10pt" align="justify"><B>Cash Sweep</B>

<P style="font-size: 10pt" align="justify">The Amendment provides for a 100% cash sweep of any excess cash of ZSG which
will be used first to fund the debt service reserve account (the &#8220;DSRA&#8221;) established pursuant to the
Facility Agreement and second to prepay the Deferred Amount (the &#8220;Cash Sweep&#8221;). The DSRA is an account
maintained to hold and, if needed, pay up to one year&#8217;s principal and interest due under the Facility Agreement
as partial security for the Lenders. The Cash Sweep will be used to fund the DSRA to a level sufficient to service the
amounts due and payable under the Facility Agreement during the then following twelve (12)&nbsp;months (&#8220;Fully
Funded&#8221;).

<P style="font-size: 10pt" align="justify">Not included in the Cash Sweep is an amount of <FONT
face="'Times New Roman',times,serif">&#8364;</FONT>15.0&nbsp;million which ZSG is permitted to retain for working
capital purposes.

<P style="font-size: 10pt" align="justify"><B>Financial Ratios</B>

<P style="font-size: 10pt" align="justify">The Amendment implements a permitted leverage ratio of total debt under the
Facility Agreement to EBITDA (the &#8220;Senior Debt/EBITDA Cover Ratio &#8220;) which is effective from
December&nbsp;31, 2009 and is set to decline over time from 13.0x on its effective date to 4.5x on June&nbsp;30, 2017
as set out below.

<P style="font-size: 10pt" align="justify">The Amendment also revises the Facility Agreement&#8217;s annual debt
service cover ratio (the &#8220;Annual Debt Service Cover Ratio&#8221;) requirement to be at least 1.1x for the period
from December&nbsp;31, 2011 to December&nbsp;31, 2013 and 1.2x from January&nbsp;1, 2014 until Maturity.

<P style="font-size: 10pt" align="justify"><B>Events of Default</B>

<P style="font-size: 10pt" align="justify">The Amendment includes the following as events of default:

<P>
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  <TD nowrap align="left" width="3%">(a)</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>
<DIV style="text-align: justify">if scheduled debt service for two consecutive periods is partially or wholly financed
by drawings from the DSRA and as a result the DSRA is less than
33<FONT style="font-size: 70%"><SUP>1</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>% Fully Funded;</DIV>
</TD>
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<P>
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 <TR style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000" valign="top">
  <TD nowrap align="left" width="3%">(b)</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>
<DIV style="text-align: justify">if the DSRA is fully drawn and ZSG exercises its current 6-month principal payment
deferral right in respect of the next repayment date;</DIV>
</TD>
 </TR>

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<P>
<TABLE style="font-size: 10pt" cellspacing="0" cellpadding="0" width="100%" border="0">

 <TR style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000" valign="top">
  <TD nowrap align="left" width="3%">(c)</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>
<DIV style="text-align: justify">failure to meet the Annual Debt Service Cover Ratio as set out above; and</DIV>
</TD>
 </TR>

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<P>
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 <TR style="font-size: 10pt; background: none transparent scroll repeat 0% 0%; color: #000000" valign="top">
  <TD nowrap align="left" width="3%">(d)</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>
<DIV style="text-align: justify">if the Senior Debt/EBITDA Cover Ratio is above the amounts set out in the following
table:</DIV>
</TD>
 </TR>

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  <TD width="5%">&nbsp;</TD>
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  <TD width="5%">&nbsp;</TD>
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  <TD width="5%">&nbsp;</TD>
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  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">Testing Date </DIV></TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="center">Ratio </TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">Testing Date </TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="center" colspan="2">Ratio </TD>
  <TD>&nbsp;</TD>
 </TR>

<TR style="font-size: 1px">
<TD style="border-top: #000000 1px solid" valign="top"><DIV style="margin-left: 0px; text-indent: 0px">&nbsp;</DIV></TD>
  <TD>&nbsp;</TD>
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  <TD style="border-top: #000000 1px solid" valign="top" nowrap align="center">&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD style="border-top: #000000 1px solid" valign="top" align="center">&nbsp; </TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD style="border-top: #000000 1px solid" valign="top" nowrap align="center">&nbsp;</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">12/31/09 </DIV></TD>
  <TD>&nbsp;</TD>

  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">13.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>

  <TD>&nbsp;</TD>
  <TD valign="top" align="center">12/31/13 </TD>
  <TD>&nbsp;</TD>

  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">6.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
 </TR>


<TR valign="bottom" style="padding-top: 1px">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">06/30/10 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">11.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">06/30/14 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">5.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">12/31/10 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">11.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">12/31/14 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">5.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">06/30/11 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">7.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">06/30/15 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">5.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">12/31/11 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">7.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">12/31/15 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">5.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">06/30/12 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">7.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">06/30/16 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">5.0</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">12/31/12 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">6.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">12/31/16 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">4.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
 </TR>

<TR valign="bottom">
  <TD valign="top"><DIV style="margin-left: 0px; text-indent: 0px">06/30/13 </DIV></TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">6.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="center">06/30/17 </TD>
  <TD>&nbsp;</TD>
  <TD valign="top" nowrap align="left">&nbsp;</TD>
  <TD valign="top" align="center">4.5</TD>
  <TD valign="top" nowrap>&nbsp;</TD>
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<P style="font-size: 10pt" align="justify"><B>Equity Cures</B>

<P style="font-size: 10pt" align="justify">The Amendment provides that ZSG and its shareholders may, once per fiscal
year, cure a deficiency in either the Annual Debt Service Cover Ratio or the Senior Debt/EBITDA Cover Ratio by way of a
capital contribution or fully subordinated shareholder loan to ZSG in the amount necessary to cure such deficiency and
thereby prevent the occurrence of an event of default.

<P style="font-size: 10pt" align="justify"><B>Capital Contribution</B>

<P style="font-size: 10pt" align="justify">Under the terms of the Amendment, the Company is required to make a capital
contribution to ZSG in the amount of <FONT face="'Times New Roman',times,serif">&#8364;</FONT>10.0 million.

<P style="font-size: 10pt" align="justify">Additionally, the Company may be required to make a further capital
contribution if, in the period from December&nbsp;31, 2011 until the date when all of the loans pursuant to the
Facility Agreement are repaid in full, the Company raises aggregate actual net proceeds of <FONT
face="'Times New Roman',times,serif">&#8364;</FONT>20.0&nbsp;million or more from an equity financing and on the first
day of trading of shares issued pursuant to such financing, the DSRA is not Fully Funded.

<P style="font-size: 10pt" align="justify"><B>Amendment Fees</B>

<P style="font-size: 10pt" align="justify">In connection with the Amendment, ZSG will pay a work fee of <FONT
face="'Times New Roman',times,serif">&#8364;</FONT>25,000 to each Lender, and an additional liquidity charge of 45
basis points on outstanding amounts in respect of the Deferred Amount. ZSG will also pay an amendment fee of
approximately <FONT face="'Times New Roman',times,serif">&#8364;</FONT>3.3&nbsp;million, payable pro-rata to each
Lender either in two equal installments, half on the date the DSRA is Fully Funded for the first time and the balance
on the first repayment date thereafter, or in full on the date of repayment or prepayment in full of the Deferred
Amount.

<P style="font-size: 10pt" align="center">

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<P style="font-size: 10pt" align="justify"><B>Conditions Precedent</B>

<P style="font-size: 10pt" align="justify">The Amendment is subject to customary conditions precedent, including
requisite corporate approvals of ZSG and satisfactory opinions, which are expected to be completed on or before
March&nbsp;15, 2009.

<P style="font-size: 10pt" align="justify">A copy of the Company&#8217;s press release announcing the Amendment is
attached hereto as Exhibit&nbsp;99.1.
<P style="font-size: 10pt" align="justify"><B>ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS</B>

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  <TD width="11%">&nbsp;</TD>
  <TD width="5%">&nbsp;</TD>
  <TD width="84%">&nbsp;</TD>
 </TR>
 <TR style="font-size: 10pt" valign="bottom">
  <TD style="border-bottom: #000000 1px solid" nowrap align="left"><B>Exhibit No.</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid" nowrap align="center"><B>Description</B></TD>
 </TR>
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  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">99.1 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Press Release dated February&nbsp;4, 2009</TD>
 </TR>
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</DIV>

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<P style="font-size: 10pt" align="center"><B>SIGNATURES</B>

<P style="font-size: 10pt" align="justify">Pursuant to the requirements of the <I>Securities Exchange Act of 1934</I>,
the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

<P style="font-size: 10pt; margin-left: 46%" align="justify"><B>MERCER INTERNATIONAL INC.</B>

<P style="font-size: 10pt; margin-left: 46%" align="justify"><U><I>David Gandossi
</I><B><I>/</I></B><I>s/&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</I></U>
<BR>
David M. Gandossi <BR>
Chief Financial Officer

<P style="font-size: 10pt" align="justify">Date: February&nbsp;9, 2009

<P style="font-size: 10pt" align="center">&nbsp;

<P style="font-size: 10pt" align="center">

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<P style="font-size: 10pt" align="center"><B>MERCER INTERNATIONAL INC.</B>

<P style="font-size: 10pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 10pt" align="center"><B>EXHIBIT INDEX</B>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" cellpadding="0" width="100%" border="0">
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  <TD width="5%">&nbsp;</TD>
  <TD width="84%">&nbsp;</TD>
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 <TR style="font-size: 10pt" valign="bottom">
  <TD style="border-bottom: #000000 1px solid" nowrap align="left"><B>Exhibit Number</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid" nowrap align="center"><B>Description</B></TD>
 </TR>
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  <TD valign="top">
<DIV style="margin-left: 0px; text-indent: 0px">99.1 </DIV>
</TD>
  <TD>&nbsp;</TD>
  <TD valign="top" align="left">Press Release dated February&nbsp;4, 2009</TD>
 </TR>
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</TABLE>
</DIV>

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{"company-data": {"conformed-name": "MERCER INTERNATIONAL INC.", "cik": "0001333274", "assigned-sic": "2611", "irs-number": "470956945", "state-of-incorporation": "WA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-51826", "film-number": "09581333"}, "business-address": {"street1": "14900 INTERURBAN AVENUE SOUTH", "street2": "SUITE 282", "city": "SEATTLE", "state": "WA", "zip": "98168", "phone": "(206) 674-4639"}, "mail-address": {"street1": "14900 INTERURBAN AVENUE SOUTH", "street2": "SUITE 282", "city": "SEATTLE", "state": "WA", "zip": "98168"}, "former-company": {"former-conformed-name": "MERCER INTERNATIONAL REGCO INC.", "date-changed": "20050715"}}
Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2009
MERCER INTERNATIONAL INC.
(Exact
name of registrant as specified in its charter)
Washington
000-51826
47-0956945
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
Suite 2840, 650 West Georgia Street,
Vancouver, British Columbia,
Canada
V6B 4N8
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
(604)
684-1099
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On February 4, 2009, Mercer International Inc.'s (the
"Company") 70% owned subsidiary, Zellstoff Stendal GmbH ("ZSG"), the owner and operator of the
Stendal mill, completed an agreement (the "Amendment") with its lending syndicate (the
"Lenders") to amend the project financing facility agreement (the "Facility Agreement") dated
August 26, 2002 governing the project loan facility established for the construction and operation of the Stendal
mill.
The description below is a summary of the terms of the Amendment. It does
not purport to be complete and is qualified in its entirety by the complete text of the Amendment itself, which will be
filed as an exhibit to the Company's annual report on Form 10-K for the period ended December 31, 2008.
Deferral of Principal Payments
The Amendment revises the repayment schedule of principal payments due by
deferring
€
164.0 million of scheduled principal payments
(the "Deferred Amount") until the Facility Agreement's maturity on September 30, 2017
("Maturity").
Cash Sweep
The Amendment provides for a 100% cash sweep of any excess cash of ZSG which
will be used first to fund the debt service reserve account (the "DSRA") established pursuant to the
Facility Agreement and second to prepay the Deferred Amount (the "Cash Sweep"). The DSRA is an account
maintained to hold and, if needed, pay up to one year's principal and interest due under the Facility Agreement
as partial security for the Lenders. The Cash Sweep will be used to fund the DSRA to a level sufficient to service the
amounts due and payable under the Facility Agreement during the then following twelve (12) months ("Fully
Funded").
Not included in the Cash Sweep is an amount of
€
15.0 million which ZSG is permitted to retain for working
capital purposes.
Financial Ratios
The Amendment implements a permitted leverage ratio of total debt under the
Facility Agreement to EBITDA (the "Senior Debt/EBITDA Cover Ratio ") which is effective from
December 31, 2009 and is set to decline over time from 13.0x on its effective date to 4.5x on June 30, 2017
as set out below.
The Amendment also revises the Facility Agreement's annual debt
service cover ratio (the "Annual Debt Service Cover Ratio") requirement to be at least 1.1x for the period
from December 31, 2011 to December 31, 2013 and 1.2x from January 1, 2014 until Maturity.
Events of Default
The Amendment includes the following as events of default:
(a)
if scheduled debt service for two consecutive periods is partially or wholly financed
by drawings from the DSRA and as a result the DSRA is less than
33
1
/
3
% Fully Funded;
(b)
if the DSRA is fully drawn and ZSG exercises its current 6-month principal payment
deferral right in respect of the next repayment date;
(c)
failure to meet the Annual Debt Service Cover Ratio as set out above; and
(d)
if the Senior Debt/EBITDA Cover Ratio is above the amounts set out in the following
table:
Testing Date
Ratio
Testing Date
Ratio
12/31/09
13.0
12/31/13
6.0
06/30/10
11.0
06/30/14
5.5
12/31/10
11.0
12/31/14
5.5
06/30/11
7.5
06/30/15
5.0
12/31/11
7.5
12/31/15
5.0
06/30/12
7.0
06/30/16
5.0
12/31/12
6.5
12/31/16
4.5
06/30/13
6.5
06/30/17
4.5
Equity Cures
The Amendment provides that ZSG and its shareholders may, once per fiscal
year, cure a deficiency in either the Annual Debt Service Cover Ratio or the Senior Debt/EBITDA Cover Ratio by way of a
capital contribution or fully subordinated shareholder loan to ZSG in the amount necessary to cure such deficiency and
thereby prevent the occurrence of an event of default.
Capital Contribution
Under the terms of the Amendment, the Company is required to make a capital
contribution to ZSG in the amount of
€
10.0 million.
Additionally, the Company may be required to make a further capital
contribution if, in the period from December 31, 2011 until the date when all of the loans pursuant to the
Facility Agreement are repaid in full, the Company raises aggregate actual net proceeds of
€
20.0 million or more from an equity financing and on the first
day of trading of shares issued pursuant to such financing, the DSRA is not Fully Funded.
Amendment Fees
In connection with the Amendment, ZSG will pay a work fee of
€
25,000 to each Lender, and an additional liquidity charge of 45
basis points on outstanding amounts in respect of the Deferred Amount. ZSG will also pay an amendment fee of
approximately
€
3.3 million, payable pro-rata to each
Lender either in two equal installments, half on the date the DSRA is Fully Funded for the first time and the balance
on the first repayment date thereafter, or in full on the date of repayment or prepayment in full of the Deferred
Amount.
Conditions Precedent
The Amendment is subject to customary conditions precedent, including
requisite corporate approvals of ZSG and satisfactory opinions, which are expected to be completed on or before
March 15, 2009.
A copy of the Company's press release announcing the Amendment is
attached hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No.
Description
99.1
Press Release dated February 4, 2009
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934
,
the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MERCER INTERNATIONAL INC.
David Gandossi
/
s/
David M. Gandossi
Chief Financial Officer
Date: February 9, 2009
MERCER INTERNATIONAL INC.
FORM 8-K
EXHIBIT INDEX
Exhibit Number
Description
99.1
Press Release dated February 4, 2009