Atlanta, Georgia, USA, 25 June 2009 -- /PRNewswire/ -- Caraustar Industries, Inc. (OTC: CSARQ) announced that the Bankruptcy Court for the Northern District of Georgia granted final authorization for the company to borrow all amounts available under its USD 75 million debtor-in-possession (DIP) credit facility from General Electric Capital Corporation, pursuant to the terms and conditions of the DIP facility agreement, and to use the amounts borrowed under the DIP facility to fund working capital and other general corporate needs.
"The court approval gives Caraustar and its stakeholders additional financial flexibility to continue to do what we do best, run safe manufacturing operations and service customers. The approval of the DIP facility also supports our efforts to emerge as a financially stronger company. We are committed to the long-term profitability of the company and remain steadfast in providing our customers with innovative products and excellent service," said
Michael J. Keough, president and chief executive officer of Caraustar.
The court had previously authorized the immediate use of up to USD 25 million of the USD 75 million senior secured DIP facility, the use of the company's existing cash management systems and substantially all of its existing bank accounts, and the payment of pre- and post-petition invoices to trade creditors (general unsecured claims) in the ordinary course of business.
As previously announced, Caraustar reached agreement with holders of approximately 83% of its 7 3/8% Senior Notes maturing 01 June 2009, and 91% of its 7 1/4% Senior Notes maturing 01 May 2010, on the terms of a cooperative financial restructuring that would reduce the company's debt obligations by approximately USD 135 million.
The company and its domestic subsidiaries filed voluntary Chapter 11 petitions along with a pre-negotiated plan of reorganization in the United States Bankruptcy Court for the Northern District of Georgia on 31 May 2009. The cases will be jointly administered and the main case has been assigned case number 09-73830. Additional information about Caraustar's restructuring is available at the company's Web site at www.caraustar.com or via the company's restructuring information line at 1-800-251-2580.
Caraustar Industries, Inc. is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. The company is a socially responsible corporation, is committed to environmentally sound practices, and is dedicated to providing customers with outstanding value through innovative products and services. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. For additional information on Caraustar, visit www.caraustar.com.