Spartech amends notes, loans to allow for asset sales, restructuring

By Angela McDaniels

Tacoma, Wash., July 23 - Spartech Corp. said it made "minor" amendments to its senior notes and bank credit facility that allow for additional restructuring activities and eliminate restrictions on the sale of assets that will facilitate divestitures of its non-core businesses.

The notes amended were the company's $150 million of 5.54% senior notes due 2016 and $50 million 5.78% senior notes due 2011, both of which were issued in private placements.

Among other changes, the amendments modify the definition of EBITDA and require the company to prepay the debt with a portion of any proceeds in excess of $1 million received from asset sales made in the ordinary course of business, asset sales made by a subsidiary or the asset sale that will result from the asset exchange being made in connection with the acquisition of assets of a division of an unaffiliated company.

Spartech said the planned acquisition was previously disclosed to the debtholders.

The portion of the proceeds to be applied toward repayment will be 75% if the company's leverage ratio is 3.5 to 1 or greater, 50% if the ratio is less than 3.5 to 1 but greater than or equal to 2.5 to 1 and 0% if the ratio is less than 2.5 to 1, according to an 8-K filing with the Securities and Exchange Commission.

Spartech is a St. Louis-based maker of plastic sheet, compounds and packaging products.

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