- Current report filing (8-K)
February 25 2010 - 1:26PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
February 22, 2010
SMURFIT-STONE
CONTAINER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
|
|
0-23876
|
|
43-1531401
|
(State or other jurisdiction of
|
|
(Commission
|
|
(I.R.S. Employer
|
incorporation
or organization)
|
|
File
Number)
|
|
Identification
No.)
|
222 N. LaSalle Street
Chicago, Illinois
60601
(Address of principal executive offices) (Zip Code)
(312) 346-6600
(Registrants telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o
Written communications
pursuant to Rule 425 under the Securities Act.
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act.
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act.
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act.
Item 1.01.
Entry into a Material Definitive Agreement.
On January 26, 2009, Smurfit-Stone
Container Corporation (the Company) and its U.S. and Canadian subsidiaries filed
a voluntary petition (the Chapter 11 Petition) for relief under Chapter 11 of
the United States Bankruptcy Code in the United States Bankruptcy Court in
Wilmington, Delaware (the Court). On
the same day, the Companys Canadian subsidiaries also filed to reorganize
under the Companies Creditors Arrangement Act (CCAA) in the Ontario Superior
Court of Justice in Canada (the Canadian Petition).
On February 1, 2010, the
Company and certain of its affiliates filed a motion with the Court seeking
approval to enter into a senior secured term loan exit facility (the Term Loan
Facility) with J.P. Morgan Chase Bank, N.A., as administrative agent, J.P.
Morgan Securities Inc., Deutsche Bank Securities Inc. (DBSI) and Banc of
America Securities LLC (BAS) as Joint Bookrunners and Co-Lead Arrangers, DBSI
as syndication agent, BAS as documentation agent, and other lenders party
thereto, as well as other documents relating thereto, including certain
security agreements.
On February 16, 2010, the
Court granted the motion and authorized the Company and certain of its
affiliates to enter into the Term Loan Facility. Based on such approval, on February 22,
2010, the Company and certain of its subsidiaries entered into the Term Loan Facility
that provides for an aggregate term loan commitment of $1,200 million. In addition, the Company has entered into a
commitment letter and related fee letters for an asset-based revolving credit
facility (the ABL Revolving Facility) with aggregate commitments of $650
million, which the Company expects to enter into prior to exiting
bankruptcy. On the date the Company
emerges from bankruptcy, the Term Loan Facility will be funded and borrowings are
expected to be available under the ABL Revolving Facility. The commitments for the Term Loan Facility
and the ABL Revolving Facility will terminate on July 16, 2010 unless the
Companys emergence from bankruptcy, funding of the Term Loan Facility and
satisfaction of certain funding date conditions under the ABL Revolving
Facility occur on or prior to such date.
The proceeds of the borrowings
under the Term Loan Facility will be used, together with cash on hand of the
Company and its subsidiaries,
to repay outstanding secured
indebtedness under the Companys pre-petition credit facility and to pay fees,
costs and expenses of approximately $50 million related to and contemplated by
the credit facilities and the Proposed Plan of Reorganization.
The Company is permitted,
subject to obtaining lender commitments, to add one or more incremental
facilities to the Term Loan Facility in an aggregate amount up to $400
million. Each incremental facility is
conditioned on (a) there existing no defaults, (b) in the case of
incremental term loans, such loans have a final maturity no earlier than, and a
weighted average life no shorter than, the Term Loan Facility, and (c) after
giving effect thereto, the consolidated senior secured leverage ratio shall be
less than 3.00 to 1.00. If the interest
rate spread applicable to any incremental facility exceeds the interest rate
spread applicable to the Term Loan Facility by more than 0.25%, then the
interest rate spread applicable to the Term Loan Facility will be increased to
equal the interest rate spread applicable to the incremental facility.
2
The term loan (Term Loan)
matures six years from the funding date of the Term Loan Facility and is
repayable in equal quarterly installments of $3 million beginning on September 30,
2010, with the balance payable at maturity.
The Term Loan is subject to mandatory prepayment on an annual basis with
50% of Excess Cash Flow for each fiscal year, commencing with the partial
fiscal year beginning on July 1, 2010 and ending on December 31,
2010, with such percentage reducing to 25% and 0% upon the Company achieving a
senior secured leverage ratio of 2.25 to 1.00 and 1.75 to 1.00, respectively. The Term Loan is also subject to mandatory
prepayment with (a) 100% of the net cash proceeds of asset sales, other
than collateral subject to a first lien securing the ABL Revolving Facility,
provided that prepayment is not required if the Company elects to reinvest up
to $250 million of such proceeds within 365 days after receipt, and (b) 100%
of the net cash proceeds from the incurrence of indebtedness with exceptions
for indebtedness permitted to be incurred under the negative covenant
provisions relating to incurrence of indebtedness.
The Term Loan will bear
interest at the Companys option at a rate equal to: (A) 3.75% plus the
alternate base rate (Term Loan ABR)
defined as the greater of: (i) the U.S. prime rate, (ii) the
overnight federal funds rate plus 0.50%, or (iii) the one month adjusted
LIBOR rate plus 1.0%, provided that the Term Loan ABR shall never be lower than
3.00% per annum, or (B) the adjusted LIBOR rate plus 4.75%, provided that
the adjusted LIBOR rate shall never be lower than 2.00% per annum.
The Term Loan will be the
direct obligation of Smurfit-Stone Container Enterprises, Inc. and will be
guaranteed by the material U.S. subsidiaries of Smurfit-Stone Container
Enterprises, Inc. The Term Loan
Facility, together with qualified cash management services and qualified
hedging obligations, will be secured by (a) a first priority lien on
substantially all assets of Smurfit-Stone Container Enterprises, Inc. and
its material U.S. subsidiaries (other than accounts receivable, inventory and
related assets) and a first priority pledge of capital stock of all material
U.S. subsidiaries and material first-tier foreign subsidiaries (limited to 65%
in the case of first-tier foreign subsidiaries) and (b) a second priority
lien on accounts receivable, inventory and related assets of Smurfit-Stone
Container Enterprises, Inc. and its material U.S. subsidiaries.
The Term Loan Facility includes
affirmative and negative covenants that impose restrictions on the Companys
financial and business operations and those of its subsidiaries, including
their ability to incur indebtedness, incur liens, make investments, sell
assets, pay dividends or make acquisitions.
The Term Loan Facility contains events of default relating to
incorrectness of representations and warranties, nonpayment of principal,
interest or other amounts, violation of covenants, cross default and cross
acceleration to other material indebtedness, certain bankruptcy and insolvency
events, material judgments, certain ERISA events, change in control, actual or
asserted invalidity of any guaranty, loan document or security interest created
under any loan document, and actual or asserted loss of status of the Term Loan
Facility as senior indebtedness. From
and after the funding date of the Term Loan, upon the occurrence of any event
of default, commitments under the Term Loan Facility may be terminated, the
loans under the Term Loan Facility may be accelerated and any remedies
available under the loan documents may be exercised.
3
Capitalized terms used in the
foregoing description and not otherwise defined herein have the respective
meanings ascribed thereto in the Term Loan Facility. The foregoing summary of the material terms
of the Term Loan Facility does not purport to be complete and is qualified by
reference to the full text of the Term Loan Facility, a copy of which is
attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 1.03.
Bankruptcy or Receivership.
On January 26, 2009, the
Company and certain affiliates filed the Chapter 11 Petition and the Canadian
Petition. The information provided in
Item 1.01 above is incorporated by reference into this Item 1.03.
Item 2.03.
Creation of a Direct Financial Obligation or an
Obligation under an Off- Balance Sheet Arrangement of a Registrant.
The information provided in
Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01.
Financial
Statements and Exhibits.
(d)
Exhibits
.
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
10.1
|
|
Credit
Agreement dated as of February 22, 2010.
|
Forward-looking statements
This Current Report on Form 8-K (including the exhibits) may
contain forward-looking statements within the meaning of the federal securities
laws, including statements regarding the intent, belief or current expectations
of the Company and its management which are made with words such as will, expect,
believe, and similar words. These forward-looking statements involve a number
of risks, uncertainties and other factors, which may cause the actual results
to be materially different from those expressed or implied in the
forward-looking statements. Important factors that could cause the actual
results of operations or financial condition of the company to differ from
expectations include: (i) the Companys ability to continue as a going
concern; (ii) the ability of the Company to operate pursuant to the terms of
the Term Loan Facility; (iii) the Companys ability to obtain court
approval with respect to motions in its Chapter 11 cases; (iv) the ability
of the Company to develop, confirm and consummate one or more plans of
reorganization with respect to its Chapter 11 cases; (v) the ability of
the Company to obtain and maintain normal terms with vendors and service
providers; (vi) the Companys ability to maintain contracts that are critical
to its operations; (vii) the potential adverse impact of its Chapter 11
cases on the Companys liquidity or results of operations; (viii) the
ability of the Company to fund and execute its business plan; (ix) the
ability of the Company to attract, motivate and/or retain key executives and
employees; and (x) other risks and factors regarding the Company described
in the Companys Annual Report
4
on Form 10-K for the year ended December 31, 2008, as updated
from time to time in the Companys Securities and Exchange Commission filings.
The Company does not intend to review, revise, or update any particular
forward-looking statements in light of future events.
5
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
|
February 22,
2010
|
|
|
|
|
|
|
|
|
|
SMURFIT-STONE
CONTAINER CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
Craig A. Hunt
|
|
|
|
Name:
|
Craig
A. Hunt
|
|
|
|
Title:
|
Senior
Vice President, Secretary and
|
|
|
|
|
General
Counsel
|
6
Spirits Capital (PK) (USOTC:SSCC)
Historical Stock Chart
From Jul 2024 to Jul 2024
Spirits Capital (PK) (USOTC:SSCC)
Historical Stock Chart
From Jul 2023 to Jul 2024