Atlanta, Georgia, USA, 21 August 2009 -- /PRNewswire/ -- Caraustar Industries, Inc. announced today that it has emerged from Chapter 11 as a newly reorganized private company and eliminated approximately USD 135 million in debt.
Michael J. Keough, president and chief executive officer, 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 USD 2.9 million. The company's 7-3/8% and 7-1/4% Senior Notes have been exchanged for an aggregate of USD 85 million in new Senior Secured Notes and 100% of the common stock of the reorganized company.
Caraustar has closed on a new USD 75 million revolving credit facility with General Electric Capital Corporation, 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.
"We are in a significantly stronger competitive position today than we have been at any time in the past decade," Keough said. "With one of the strongest balance sheets in the industry, we look forward to building upon our 70-year heritage to continue to provide the innovation, products, and services our customers have come to expect from Caraustar, as well as implementing future plans to re-invest in the business and continuing our growth.
"During the brief 82-day period in which Caraustar operated under Court supervision -- a record for the Bankruptcy Court for the Northern District of Georgia -- customers continued to receive superior customer service, vendors were paid in the ordinary course of business with no losses, and all of our employees worked incredibly hard to support the company's reorganization efforts."
The company has been active in rationalizing its portfolio by exiting under-performing businesses; right-sizing operations through consolidation of facilities; reducing selling, general, and administrative expenses; and restructuring the company's balance sheet through the exchange of debt for equity complements that effort.
"We are the same company, but with increased financial strength, organizational stability and momentum," Keough said. "Our new capital structure, combined with the cost savings achieved by operating as a private entity, provides a lean and flexible foundation for sustainable profitability."
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.