Caraustar Reduces Debt Obligation by $135 Million (8/25/09)
Caraustar Industries Inc. recently announced that it has emerged from Chapter 11 as a newly reorganized private company, eliminating approximately $135 million in debt.
Michael J. Keough, president and CEO, said, “We are gratified that the company has been able to expeditiously implement its plan of reorganization with minimal business disruption and in record time. As a result, Caraustar emerges with a strong, stable platform from which to operate, invest and grow our business. This is a tremendous accomplishment.”
Under the plan, shares of the company’s common stock will be retired and previous shareholders will receive a pro rata share of $2.9 million. The company’s 7⅜ percent and 7¼ percent senior notes have been exchanged for an aggregate of $85 million in new senior secured notes and 100% of the common stock of the reorganized company.
Caraustar has closed on a new $75 million revolving credit facility with General Electric Capital Corp., which provides Caraustar with more than adequate liquidity to meet all of its working capital needs, including any future capital investments. The company has made no borrowings against the new facility.
The company has been very active in rationalizing its portfolio by exiting under-performing businesses, right-sizing operations through consolidation of facilities and reducing selling, general, and administrative expenses. Restructuring the company’s balance sheet through the exchange of debt for equity complements that effort.
For more information, visit: www.caraustar.com.