New York, New York, USA, 13 July 2009  --  (GLOBE NEWSWIRE)  --  Mercer International Inc. (Nasdaq:MERC - News; TSX:MRI.U - News) today announced that it has commenced an exchange offer for any and all of its outstanding 8.5% Convertible Senior Subordinated Notes due 2010 (the Old Notes). Under the terms of the Exchange Offer, Mercer is offering to exchange each USD 1000 principal amount of the Old Notes for: 

• 129 shares of Mercer common stock; plus
  
• a premium of USD 200 in principal amount of Mercer's new 3% Convertible Senior Subordinated Notes due October 2012 (the New Notes); and
  
• accrued and unpaid interest to, but excluding, the settlement date (the Interest).
  

The Old Notes are currently convertible into Mercer common stock at a conversion rate of 129 shares per USD 1000 principal amount, or a conversion price of USD 7.75 per share. Under the Exchange Offer holders who elect to tender their Old Notes will receive the same number of shares of Mercer common stock that would be issuable upon conversion at the existing terms of the Old Notes, plus the premium in the New Notes and the Interest. The New Notes will be substantially the same as the Old Notes but will accrue interest at a rate of 3% per annum and be convertible into Mercer common stock at a conversion price of USD 2.75 per share. As at 31 March 2009, approximately USD 67.3 million principal amount of the Old Notes was outstanding.

The Exchange Offer is being made on the terms and conditions set forth in an offering circular dated 13 July 2009, and the related letter of transmittal. Copies of these and other documents will be distributed to all holders of the Old Notes. Requests for additional copies of such documents or questions regarding the procedures for tendering the Old Notes may be directed to the Information Agent for the Exchange Offer, Georgeson Inc., at 1-800-267-4403 (toll free).

The Exchange Offer is exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 3(a)(9) thereof and will expire at 5:00 p.m. Eastern Time on 11 August 2009, unless extended or earlier terminated. Tendered Old Notes may be withdrawn before, but not after the expiration time.

Jimmy S.H. Lee, president and chairman, stated, "The Exchange Offer provides us with the opportunity to retire a significant portion of our long-term debt early and reduce our debt obligations and annual interest expense. While the amount of the debt and interest expense reductions will be dependent upon the level of participation by holders, we expect that the transaction will strengthen our overall capital structure."

Consummation of the Exchange Offer is subject to the conditions set forth in the Offering Circular and the Letter of Transmittal. Subject to applicable law, Mercer may amend, extend, or terminate the Exchange Offer at any time.

Mercer International Inc. is a global pulp manufacturing company. To obtain further information on the company, visit http://www.mercerint.com.