RICHMOND, Va., Aug. 1 /PRNewswire-FirstCall/ -- Chesapeake Corporation (NYSE: CSK) today announced that it has developed a comprehensive refinancing plan to address the upcoming maturity of its bank credit facility and its general liquidity needs. Chesapeake expects that, upon completion, this proposed refinancing plan will address the company's short- and long-term capital needs while providing Chesapeake with the necessary financial flexibility to improve earnings and create value for all stakeholders by realizing the benefits associated with an improving business platform that is focused on packaging applications for the pharmaceutical and healthcare industries and other specialty packaging end-use markets.

The proposed refinancing plan is expected to include: (1) new senior secured credit facilities to be used to fully repay the company's existing $250-million senior secured credit facility and provide incremental liquidity, and (2) an offer to exchange the company's outstanding 10-3/8% Sterling-denominated senior subordinated notes due in 2011 and its 7% euro-denominated senior subordinated notes due in 2014 for new debt and equity securities. Chesapeake has engaged Lucid Issuer Services (tel. +44 20 7704 0880, email: chesapeake@lucid-is.com) as information agent to facilitate discussions with noteholders regarding the exchange offer. The company expects to continue to work with GE Commercial Finance Limited and General Electric Capital Corporation to participate in elements of the new senior secured credit facilities. Chesapeake anticipates commencing the exchange offer and marketing for the new senior secured credit facilities in September 2008.

'We believe this comprehensive refinancing plan can provide the financial flexibility we need to execute our long-term business plan,' said Andrew J. Kohut, Chesapeake president & chief executive officer. 'We have engaged the global professional services firm Alvarez & Marsal LLP to provide certain consulting services, including evaluating Chesapeake's business plan. We expect to move quickly with this refinancing plan and are focused on serving our customers during the seasonal peak of our year.'

As previously disclosed, the company expects that, as of the end of the third fiscal quarter of 2008, it may not be in compliance with the financial covenants set forth in its existing credit facility.