- Expects a significant improvement in capital structure to support future growth and profitability
- Operations to continue as usual at all facilities
- $750 million in new financing provides ample liquidity
CREVE COEUR, Mo. and CHICAGO, Jan. 26 /PRNewswire-FirstCall/ -- Smurfit-Stone Container Corporation (Nasdaq: SSCC) today announced that it and its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court in Wilmington, Delaware. The Canadian subsidiaries will also file to reorganize under the Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice in Canada.
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The Company plans to use this process to restructure its debt, resulting in a capital structure more suited to support its long-term growth and profitability. The Company's normal day-to-day operations will continue without interruption. Smurfit-Stone remains completely focused on serving its customers.
The Company also announced that, pending Court approval, it has received commitments for up to $750 million in debtor-in-possession (DIP) financing to fund continuing operations. Of this total, $350 million consists of new incremental funding; approximately $400 million represents replacement of existing Accounts Receivable Securitization facilities both in the U.S. and Canada. The DIP financing will enable the Company to continue to satisfy customary obligations associated with ongoing operations of its business, including payment of employee wages and benefits in the ordinary course, and payment of post-petition obligations to vendors under existing terms.
Patrick J. Moore, chairman and CEO, said, 'Over the past decade, we built one of North America's premier containerboard and packaging companies. But, our financial performance has not reflected the full potential of our earnings power due to higher cost operations and burdensome debt levels dating back to the original formation of the company. As a result of our three-year transformation program, we have been focused on improving our operating performance and our operations are now well invested and far more cost effective.
