A special committee of independent directors of Mercer International Inc.’s (the "Company") board, together with the Company’s advisors, is in advanced discussions with an ad hoc group of holders (the "Ad Hoc Group") of the Company’s 12.875% Senior Notes due 2028 (the "2028 Notes") and the Company’s 5.125% Senior Notes due 2029 (together with the 2028 Notes, the "Notes"), members of which hold greater than 75% of the aggregate outstanding principal amount of the Notes, regarding the principal terms of a comprehensive recapitalization transaction and a significant capital infusion (the "Transaction") intended to address the Company’s upcoming debt maturities, enhance liquidity and strengthen its balance sheet through a meaningful reduction in the Company’s funded debt and associated interest expense. The Company is optimistic that it will be able to announce a Transaction in the near term, although no assurance can be given that the Company will enter into a definitive agreement with members of the Ad Hoc Group or other holders of the Notes, or as to the timing or terms of any such agreement.

In light of ongoing negotiations with the Ad Hoc Group, the Company has elected not to make the approximately $25.8 million interest payment due October 1, 2026 on the 2028 Notes and instead opted to utilize the 30-day grace period provided under the indenture governing the 2028 Notes. Use of the grace period does not constitute an event of default under the indenture.

The Company’s pulp, lumber and mass timber operations continue to run in the ordinary course. The Company is also continuing to serve its customers and pay its suppliers, contractors and employees in the ordinary course, and does not expect any Transaction to affect its relationships with, or obligations to, these stakeholders.