Caraustar to repay all loan borrowings with asset sale proceeds

By Sara Rosenberg

New York, July 25 - Caraustar Industries Inc. plans to repay all $34 million of term loan and revolver debt under its senior credit facility using proceeds from the sale of its 50% interest in Premier Boxboard LLC, according to a news release.

The interest in Premier Boxboard was sold to Caraustar's joint venture partner, Temple- Inland Inc., for $62 million.

Excess proceeds of about $28 million as well as estimated availability of $44 million under the revolver will be available to the company for working capital and debt repayment needs.

"The company is focused on executing its plan to refinance its 7 3/8% senior notes. Completing the sale of our interest in PBL is the first step in that plan and raises a portion of the funds necessary to refinance the company's senior notes while mitigating exposure to the volatile housing market," said Michael J. Keough, president and chief executive officer, in the release.

"The company has engaged J.P. Morgan Securities Inc. as its financial advisor to assist in evaluating its financial alternatives. In addition, the company is continuing its efforts to execute the remaining steps in its refinancing plan," Keough added in the release.

Caraustar is an Austell, Ga.-based integrated manufacturer of 100% recycled paperboard and converted paperboard products.

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