Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS

Private Placement On October 3, 2012, we completed a private placement offering of $250.0 million aggregate principal amount of 5.375% Senior Notes due 2020 (the “5.375% Notes”), subject to a registration rights agreement. The 5.375% Notes are fully and unconditionally guaranteed, jointly and severally, by PHG Tea Leaves, Inc., Mollanvick, Inc., The Glatfelter Pulp Wood Company, and Glatfelter Holdings, LLC (the “Guarantors”). The net proceeds from this offering totaled approximately $246.3 million, after deducting the commissions relating to the offering and were used to tender and call $200.0 million aggregate principal amount of our outstanding 7.125% notes due November 2016, plus the payment of the applicable redemption premium and accrued interest. We used the remaining net proceeds to repay amounts outstanding under our revolving credit facility and for general corporate purposes. We agreed to pay additional interest on the 5.375% Notes if we do not comply with certain of our obligations under the applicable registration rights agreement.

Interest on the 5.375% Notes will accrue at the rate of 5.375% per annum and will be payable semiannually in arrears on April 15 and October 15, commencing on April 15, 2013.

The 5.375% Notes are redeemable, in whole or in part, at anytime on or after October 15, 2016 at the redemption prices specified in the applicable Indenture. Prior to October 15, 2016, we may redeem some or all of the Notes at a “make-whole” premium as specified in the Indenture. The Notes and the guarantees of the Notes are senior obligations of the Company and the Guarantors, respectively, rank equally in right of payment with future senior indebtedness of the Company and the Guarantors and will mature on October 3, 2020.

The 5.375% Notes contain cross default provisions that could result in all such notes becoming due and payable in the event of a failure to repay debt outstanding under the Revolving Credit Agreement at maturity or a default under the Revolving Credit Agreement that accelerates the debt outstanding thereunder.

Scaer, France Facility Fire On October 14, 2012 our paper mill in Scaer, France, which produces specialty papers and wet-laid nonwovens on two inclined wire paper machines for the food and beverage markets as well as technical specialty paper grades, sustained a fire that damaged the electrical system primarily servicing paper machine #3 and certain mill infrastructure. There were no injuries nor known environmental impact. While the initial inspection of the mill’s two paper machines indicates these assets were not damaged, it may take several weeks to restart the machines following the restoration of electrical equipment and completion of clean-up activities. Paper machine #4 is expected to be down approximately 3-4 weeks and paper machine #3 approximately 6-8 weeks.

The finishing and shipping operations were not impacted by the incident. Shipment of customer orders resumed within 24 hours and on site inventories are adequate to satisfy orders through mid-November. Given the flexibility of its assets and mill production systems, and available capacity at our other facilities to meet production needs, we expect no interruption in our ability to supply customers.

An assessment of the costs for the impact of inventory loss, equipment damage, and clean up costs is underway. Based on our preliminary assessment, we do not expect a significant financial impact from this incident as it is expected to be covered by insurance, subject to a deductible of $0.5 million.