Cardboard box maker Smurfit-Stone Container Corp., which has two Connecticut facilities, today filed for Chapter 11 bankruptcy protection as it looks to restructure a heavy debt amid a global credit freeze.
The Chicago-based company, which employs nearly 22,000 people working at about 150 facilities across North America and in Asia, said it filed for protection from creditor claims in the U.S. Bankruptcy Court in Wilmington, Del., while it develops a financial reorganization plan.
Its Canadian units will file under the companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice, the company said.
In Connecticut, Smurfit-Stone said it has about 120 workers at a Portland mill producing cardboard packaging, and another 90 at an Uncasville plant making paper for cardboard packaging.
Smurfit-Stone has been struggling to repay its debt, which at the end of the third quarter was $3.5 billion — nearly half its yearly revenue of roughly $7.5 billion.
Chairman and Chief Executive Patrick J. Moore said in a statement that by restructuring its debt Smurfit-Stone would create a better capital structure.
“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,” Moore said in a statement. “While this is not the outcome we anticipated, we are taking this action to become a more financially healthy company.”
The company said it expects to continue operations during the bankruptcy process and has received commitments for up to $750 million in debtor-in-possession financing to fund continuing operations. Of that $750 million, some $350 million is new incremental financing, while the remainder represents replacement of existing credit.
At 11 a.m., Smurfit-Stone shares traded at around 4 cents, down about 2 cents, or 35.4 percent. (AP)
