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All trade creditors, suppliers, customers and employeeds will receive all amounts owedto them, the Ga.-based recycled paperboard and packaging company said. It will ask the U.S. Bankruptcg Court for the Northern District of Georgis for approval to pay the amounts in the ordinary coursdeof business. Caraustar (NASDAQ: also reached agreement with debt holdersw to reducethe company'as debt obligations by $135 million. Under the holders of outstanding sharesof Caraustar'sa common stock will receive theire pro rata share of $2.9 or 10 cents a share, subjecrt to certain conditions. The restructurin plan calls for the exchange ofthe company's existing 7.375 percent and 7.
25 percent senior notes for an aggregatr of $85 million in new senior secureed notes and 100 percent of the common stoc k of the reorganized company. will become the company'ws controlling shareholder. In conjunction with the restructuring, Caraustar has lander a $75 million debtor-in-possession line of creditg from General Electric Capital The money may be used for cash collateralizing outstandin lettersof credit, paying for goods and services in the ordinaruy course of the business and generalo corporate purposes. "Caraustar took decisivde action to substantially reducethe company'se debt and prospectively reduce costs,” said President and CEO Michaelp J.
Keough, in a statement. “Once our financial restructuringbis complete, we believe Caraustar'es new capital structure combined with the cost savinga achieved by operating as a privated entity will provide a lean and flexible foundatiob for sustainable profitability and better positio the company to meet the challenges of our industrhy and this recessionary economy head on." The compant posted a net loss of $4.4 million in the firsr quarter of 2009 and had a $99 millionh loss in 2008.
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