Constar, which makes plastic containers for food, soft drinks and water, said in a release dated 30 December 2008 that a bankruptcy filing would allow it to cut debt by $175m and reduce its annual interest expense by $19.3m. It plans to continue operations as usual.
The day before, Chesapeake Corp, a maker of paperboard and plastic packaging, filed for Chapter 11 bankruptcy protection and said it plans to sell itself to a group of private equity firms after the slowing economy and aggressive competition made it impossible for it to keep up with interest payments on its debt. It also plans to continue business as usual.
Both companies arranged for debtor-in-possession financing to fund operations while they restructure. Constar said it has reached an agreement with existing bank lenders to provide DIP and exit financing of $75m, subject to court approval.
Source: Reuters
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