Canadian pulp producer Mercer International plans to file for Chapter 11 bankruptcy as part of a restructuring that would slash its debt and bring in $400 million of new money. The company said it has entered an agreement with holders of more than 87% of its senior notes and a majority of its shareholders. The deal would exchange about $1.1 billion of senior notes for equity, reducing that debt by about 88%. It plans to file a prepackaged Chapter 11 in Texas. The new money will come through a $400 million rights offering. Certain members of an ad hoc group of noteholders have fully backstopped the offering. Existing shareholders will receive 8.5% of the reorganized company’s new common stock and 3.5% of its new convertible preferred stock. Existing shares will be canceled when the restructuring becomes effective. Mercer, which has been struggling with rising fiber, energy costs and persistent cash burn, had been in negotiations with creditors to address its thinning cash reserves.