As we surmised as recently as two weeks ago in our Death Watch summary, Smurfit Stone container finally caved and early this morning filed for Chapter 11. Surprisingly, the company managed to procure a $750 million DIP financing. Granted of this $400 million is merely a replacement of the existing A/R securitization facility, but it is still an impressive accomplishment even though the company does have a lot of hard assets. Patrick Moore, CEO, was quoted "The acceleration of the unprecedented global economic recession has weakened demand for packaging, and the frozen credit markets have prevented an out-of-court refinancing of our capital structure. While this is not the outcome we anticipated, we are taking this action to become a more financially healthy company."
Financial advisors on the case are Sidley Austin, Stikeman Elliott and Lazard, which has a 50/50 track record lately in arranging DIPs.
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