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SKG launches amendment to further extend its debt maturities

8 February 2012

SKG launches amendment to further extend its debt maturities

​Smurfit Kappa Group plc (“SKG” or the “Group”), one of the world’s largest integrated manufacturers of paper-based packaging products, with operations in Europe and Latin America, today announced that it is seeking the consent of its lenders to amend its Senior Credit Facility Agreement.

Overview

As reported in its 2011 fourth quarter results announcement released today, SKG continues to deliver a strong financial performance. Within the past 12 months, SKG has materially improved its financial profile and flexibility, by reducing net debt by €358 million to €2.75 billion, while maintaining a strong liquidity position and diverse funding sources. To further strengthen its capital structure the Group is now seeking the consent of its lenders to amend its Senior Credit Facility Agreement.

The proposed amendments will further increase SKG’s financial flexibility, providing it with: 

  • Extended maturity of its Senior Credit Facility
  • Increased ability to raise longer-dated capital to refinance a portion of its existing Senior Facilities
  • Flexibility to efficiently refinance its Senior Subordinated Notes Due 2015


Lenders under Term Loans B and C who agree to extend will be offered a 20% cash prepayment at par to be funded from cash on balance sheet.

A significant number of the Group’s top lenders have already confirmed their support for all of the proposed amendments and maturity extension.


Smurfit Kappa Group’s Chief Financial Officer, Mr Ian Curley, commented: “In the last 12 months, our strong cash flow generation delivered net debt reduction of €358 million to €2.75 billion, exceeding our stated net debt reduction target. Our net debt to EBITDA ratio reduced to 2.7x at the end of 2011, and our clear objective is to maintain that ratio below 3.0x through the cycle. The proposed amendments to our Senior Credit Facility form part of an ongoing process of efficient capital structure management, and will provide us with an extended debt maturity profile and significantly enhanced financial flexibility.”

 

SKG launches amendment to further extend its debt maturities 

SKG consent request letter

SKG launches amendment to further extend its debt maturities