Caraustar Receives Court Approval of First Day Motions
04 6월 2009 - 7:32AM
PR Newswire (US)
- $75 MILLION DIP FINANCING FACILITY APPROVED ATLANTA, June 3
/PRNewswire-FirstCall/ -- Caraustar Industries, Inc. (NASDAQ:CSAR)
announced that the Bankruptcy Court for the Northern District of
Georgia (the "Court') approved the company's first day motions to,
among other things, pay pre-petition general unsecured claims in
the ordinary course of business, in connection with its voluntary
restructuring under Chapter 11. As previously announced, Caraustar
reached agreement with holders of approximately 83 percent of its
7-3/8% Senior Notes maturing June 1, 2009 and 91 percent of its
7-1/4% Senior Notes maturing May 1, 2010 on the terms of a
cooperative financial restructuring that would reduce the company's
debt obligations by approximately $135 million. The Court also
granted permission for the company to pay pre-petition employee
wages and salaries, to make contributions to the 401(k) and other
employee benefit plans, and to reimburse employees for their
pre-petition business expenses. "Having received approval of our
first-day motions so quickly sets Caraustar on strong footing as we
move towards completing our recapitalization," stated Caraustar's
President and Chief Executive Officer, Michael J. Keough. "This
action by the Court will be well received by our employees,
customers and suppliers." In addition, the court approved use of
the company's existing cash management system and substantially all
of its existing bank accounts. The Court also authorized the
immediate use of up to $25 million of the $75 million senior
secured debtor-in-possession revolving credit facility from General
Electric Capital Corporation (the "DIP Facility") which will allow
the company the support required to fund operations, pay employees'
wages and benefits, and purchase goods and services during the
restructuring period. "The approval of our DIP financing and the
Court's permission to pay pre-petition general unsecured claims in
the ordinary course of business means that our trade creditors will
continue to be paid, and as a result, we expect to assure
continuity of supply to our customers." The company also announced
it received a "Staff Determination" notification from Nasdaq that
its equity securities will be delisted from The Nasdaq Stock
Market. The decision was based upon Nasdaq's Marketplace Rules
5100, 5110(b) and IM-5100-1, and was made after reviewing the
company's press release that it had filed for protection under
Chapter 11 of the U.S. Bankruptcy Code and other publicly available
information. Trading of the company's common stock on the Nasdaq
Stock Market will be suspended at the opening of business on June
11, 2009. Nasdaq will file a Form 25-NSE with the Securities and
Exchange Commission, which will remove the securities from listing
and registration. The company does not plan to appeal the Staff
Determination. These securities will not be immediately eligible to
trade on the OTC Bulletin Board or in the "Pink Sheets," but may
become eligible if a market maker makes application to register in
and quote the securities in accordance with Securities and Exchange
Commission Rule 15c2-11, and such application is cleared. 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 May 31, 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 website http://www.caraustar.com/restructure.html or via
the company's restructuring information line, 1-800-251-2580. About
Caraustar 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, please visit the company's website at
http://www.caraustar.com/. Forward Looking Statement This press
release contains certain "forward-looking statements," within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, that represent the
company's expectations, anticipations or beliefs about future
events, operating results or financial condition, restructuring
plans, business plans and industry trends and their potential
impact on the company's business and financial results. Statements
that are not statements of historical fact, as well as statements
including words such as "expect," "intend," "will," "believe,"
"estimate," "project," "budget," "forecast," "anticipate," "plan,"
"may," "would," "could," "should," "predicts," "potential,"
"continue," and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results, levels of activity, performance or
achievements to differ materially from results expressed or implied
by such statements. Such risk factors include, but are not limited
to, the company's ability to continue as a going concern; the
ability of the company to obtain court approval for, and operate
subject to, the terms of the DIP financing facility; the company's
ability to obtain court approval with respect to motions in the
Chapter 11 proceeding prosecuted by it from time to time; the
ability of the company to develop, prosecute, confirm and
consummate one or more plans of reorganization with respect to the
Chapter 11 proceeding, including a plan consistent with the terms
set forth in the plan of reorganization; risks associated with a
termination of the restructuring agreement and financing
availability; risks associated with third parties seeking and
obtaining court approval to terminate or shorten the exclusivity
period for the company to propose and confirm one or more plans of
reorganization, for the appointment of a Chapter 11 trustee or to
convert the proceeding to a Chapter 7 proceeding; the ability of
the company to obtain and maintain normal terms with customers,
vendors, employees, and suppliers; the company's ability to
maintain contracts and leases that are critical to its operations;
the potential adverse impact of the Chapter 11 proceeding on the
company's liquidity or results of operations; the effect that the
"going concern" disclosure included in the opinion of the company's
independent public accounting firm will have on the company's
relationships with customers, suppliers, vendors and employees;
fluctuations in raw material prices and energy costs; downturns in
industrial production, housing and construction and the consumption
of durable and nondurable goods; the degree and nature of
competition; demand for the company's products; the degree of
success achieved by the company's new product initiatives;
increases in pension and insurance costs; changes in government
regulations; the application or interpretation of those regulations
or in the systems, personnel, technologies or other resources we
devote to compliance with regulations; the anticipated delisting of
the company's common stock from the Nasdaq Capital Market Systems;
the impact on the company of its results of operations in recent
years and the sufficiency of its financial resources to absorb the
impact; and the company's ability to successfully dispose of its
assets held for sale. Additional relevant risk factors that could
cause actual results to differ materially are discussed in the
company's registration statements and its most recent reports on
Form 10-K, 10-Q and 8-K, as amended, filed with or furnished to,
the Securities Commission. These documents may be accessed through
the web site of the Securities and Exchange Commission
(http://www.sec.gov/). The company does not undertake any
obligation to update any forward-looking statements and is not
responsible for any changes made to this document by wire or
Internet services. The process presents inherent material
uncertainty. It is not possible to determine with certainty the
length of time it will take the company to complete the
restructuring, including the timing of court approvals, the effect
of any third party proposals for competing plans of reorganization,
whether all necessary approvals are ultimately obtained for the
reorganization under the proposed terms, whether the plan of
reorganization will be successful, or the outcome of the
restructuring in general. In addition, the implementation of a plan
of reorganization is dependent upon a number of conditions typical
in similar reorganizations, including approval by the requisite
holders of Senior Notes and court approval of the plan of
reorganization. While the company is in the process of
restructuring, investments in its securities will be highly
speculative. Further, if the plan is implemented as described in
this press release, the presently outstanding shares of the
company's common stock will be cancelled. CONTACT: William A. Nix
VP, Finance and Chief Accounting Officer (770) 948-3101 DATASOURCE:
Caraustar Industries, Inc. CONTACT: William A. Nix, VP, Finance and
Chief Accounting Officer, Caraustar, +1-770-948-3101 Web Site:
http://www.caraustar.com/
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