ALPHARETTA, Ga. (News release) -- Dunn Paper, a leading paper, tissue, and packaging products manufacturer announced today that it has obtained a new credit facility in order to facilitate the financial restructuring necessary to strengthen its balance sheet and position the Company for future success. The Company has also obtained a forbearance from its senior lenders related to its missed March 31, 2022 interest payment.
Wade Kemnitz, President and CEO of Dunn said, "Today is an important first step toward a more sustainable capital structure. The new credit facility and the support shown by our lenders demonstrate the underlying value of our business as we execute our business plan and continue operating in the ordinary course with our customers and suppliers."
The proceeds of the new credit facility, together with cash generated from daily operations and cash on hand, will be used to fund operating and recapitalization-related expenses. Dunn's management team will continue to manage both the U.S. and Canadian businesses. The Company expects to use the time afforded to it under the forbearance to negotiate the terms of a value-maximizing transaction that will result in a more sustainable long-term capital structure.
Mr. Kemnitz stated, "The current and recent business environment for pulp and other key inputs has led to declining profitability. These factors, together with supply chain disruptions and contractions in trade credit, have resulted in elevated leverage. Dunn's focus has always been on serving its customers, acting as a valued partner to its suppliers, and providing a safe, engaging environment for its employees. Once our recapitalization efforts are complete, I'm confident the Company can return to profitable growth in the various segments in which we excel and where our customers rely on us to serve their packaging and absorbent tissue needs. I'd like to thank our valued customers and suppliers who have supported us over what has been a challenging last twelve months. We intend to continue honoring their ongoing support throughout this process and beyond."
In order to help facilitate the Company's financial restructuring, Dunn Paper's Board of Directors has named David Coles as Chief Restructuring Officer. Mr. Coles is a seasoned financial restructuring expert and a Managing Director of Alvarez and Marsal, a leading restructuring firm.
The expansion of the Board augments the Board's capabilities with seasoned paper industry experience and additional restructuring expertise. The three-person Transaction Committee is tasked with negotiating and promptly implementing a financial restructuring that will position the Company for future success, while causing limited to no disruption to operations.