- Current report filing (8-K)
April 21 2010 - 10:03AM
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):
April 15, 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 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 in the Ontario Superior Court of Justice in Canada (the Canadian
Petition).
On February 3, 2010, the
Company and certain of its affiliates filed a motion with the Court seeking
approval to enter into a senior secured asset based lending facility (the ABL
Revolving Facility) with Deutsche Bank AG New York Branch (DBNY), Deutsche
Bank Securities Inc. (DBSI, and together with DBNY, DB), JPMorgan Chase
Bank N.A., (JPMCB), J.P. Morgan Securities Inc. (JP Morgan, and together
with JPMCB, JPM), certain other financial institutions acting, along
with DBSI and JP Morgan, as Lead
Arrangers, and certain other financial institutions, together with DB, JPM and
the other Lead Arrangers, as the Agents, as well as other documents relating
thereto.
On April 14, 2010, the
Court granted the motion and authorized the Company and certain of its
subsidiaries to enter into the ABL Revolving Facility. Based on such approval, on April 15,
2010, the Company and certain of its subsidiaries entered into the ABL
Revolving Facility consisting of a $550 million U.S. Facility and a $100 million
Canadian Facility. The ABL Revolving
Facility includes a $150 million sub-limit for letters of credit, with $112.5 million
allocated to the U.S. Facility and $37.5 million allocated to the Canadian
Facility. The Company previously
reported on a Form 8-K dated February 22, 2010 that it and certain of
its subsidiaries entered into a term loan credit facility (Term Loan Facility)(together
with the ABL Revolving Facility, the Exit Credit Facilities). On the date the Company emerges from
bankruptcy, the Term Loan Facility will be funded and borrowings will be
available on the ABL Revolving Facility.
The commitments for 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 Company is permitted,
subject to obtaining lender commitments, to add incremental commitments under
the ABL Revolving Facility in an aggregate amount up to $150 million. Each incremental commitment is conditioned on
(a) there existing no defaults, (b) any new lender providing an
incremental commitment shall require the consent of the Administrative Agent,
each Issuing Lender, the Swingline Lender and the Fronting Lender (which
consents shall not be unreasonably withheld or delayed), (c) the minimum
amount of any increase must be at least $25 million, (d) the Company shall
not increase the commitments more than three times in the aggregate, (e) if
the interest rate margins and commitment fees with respect to the incremental
commitments are higher than those applicable to the existing commitments under
the ABL Revolving Facility, then the interest rate margins and commitment fees
for the existing commitments under the ABL Revolving Facility will be increased
to match those for the incremental commitments, and (f) the satisfaction
of other customary closing conditions.
Proceeds of the borrowings
under the ABL Revolving Facility would be utilized for working capital
purposes, capital expenditures, permitted acquisitions and general corporate
purposes.
The ABL Revolving Facility
matures four years from the funding date of the ABL Revolving Facility. The ABL Revolving Facility allows the Company
or its Canadian subsidiary, as applicable, to borrow: (a) U.S. dollar denominated base rate
loans at a rate of interest equal to the Base Rate (the greater of (i)
2
the U.S. prime lending rate, (ii) the
overnight federal funds rate plus 0.50% and (iii) the one-month adjusted
LIBOR rate plus 1.0%) plus 2.50% for the initial 90 days and, thereafter, at a
margin ranging from 2.25% to 2.75% depending on historical excess availability
under the ABL Revolving Facility; (b) U.S. dollar denominated Eurodollar
loans at a rate of interest equal to the adjusted LIBOR rate for 1, 2, 3 or 6
month, or, if agreed by all lenders, 1 or 2 week interest periods plus 3.50%
for the initial 90 days and, thereafter, at a margin ranging from 3.25% to
3.75% depending on historical excess availability under the ABL Revolving
Facility; (c) Canadian dollar denominated prime rate loans at a rate of
interest equal to the Canadian Prime Rate (the greater of (i) the Canadian
prime lending rate and (ii) the average rate for Canadian dollar bankers
acceptances having a term of 30 days plus 1.0%) plus 2.50% for the initial 90
days and, thereafter, at a margin ranging from 2.25% to 2.75% depending on
historical excess availability under the ABL Revolving Facility; and (d) Canadian
dollar denominated bankers acceptances with proceeds discounted at the
Reference Discount Rate (if provided by a Schedule I chartered bank, the
average of the discount rates for the applicable term, and if provided by any
other lender, the lesser of (i) the average of the discount rates for the
applicable term plus 1.0% and (ii) the discount rate quoted by Deutsche
Bank AG, Canada Branch). The Company
would also pay either a 0.50% or 0.75% unused commitment fee based on the
average historical utilization under the ABL Revolving Facility. The ABL Revolving Facility borrowings are
subject to a borrowing base derived from a formula based on certain eligible
accounts receivable and inventory, less certain reserves.
The
U.S. Facility will be the direct, joint and several obligation of Smurfit-Stone
Container Enterprises, Inc. (SSCE) and any material domestic subsidiary
of SSCE that becomes a U.S. Borrower (collectively with SSCE, the U.S.
Borrowers). The Canadian Facility will
be the direct, joint and several obligation of the U.S. Borrowers and
Smurfit-Stone Container Canada, L.P. (SSC Canada) and any other material
Canadian subsidiary of SSCE that becomes a Canadian Borrower (collectively with
SSC Canada, the Canadian Borrowers).
SSCE and each material domestic subsidiary of SSCE (collectively, the U.S.
Guarantors) will guaranty (the U.S. Guaranty) all obligations of SSCE and
its material domestic and Canadian subsidiaries owing under the ABL Revolving
Facility and under secured hedging agreements and secured cash management
agreements. Each material Canadian
subsidiary of SSCE that is not itself a Canadian Borrower (collectively, the Canadian
Guarantors) will guaranty (the Canadian Guaranty) all obligations of the
Canadian Borrowers owing under the ABL Revolving Facility and under secured
hedging agreements and secured cash management agreements. In no event will any Canadian subsidiary or
Canadian Borrower support or guarantee any obligation of any U.S. Borrower or
any domestic subsidiary of SSCE.
The
U.S. Facility and the obligations of the U.S. Borrowers and U.S. Guarantors
under the U.S. Guaranty and under secured hedging agreements and secured cash
management agreements will be secured by: (a) a first priority security
interest in all accounts receivable, inventory and related assets of the U.S.
Borrowers and the U.S. Guarantors (U.S. ABL Collateral); (b) a second
priority pledge of all the capital stock of each material domestic subsidiary
of SSCE and 65% of the voting stock of SSC Canada (or, if applicable, each
first tier foreign subsidiary that owns, directly or indirectly, any capital
stock of SSC Canada) and each other first tier material foreign subsidiary of
SSCE; and (c) a second priority security interest in substantially all
assets of SSCE and its material domestic subsidiaries (other than U.S. ABL
Collateral). The Canadian Facility and
the obligations of the Canadian Borrowers and Canadian Guarantors under the
Canadian Guaranty and under secured hedging agreements and secured cash
management agreements will be secured by a first priority security interest (a) in
all accounts receivable, inventory and related assets of the Canadian Borrowers
and the Canadian Guarantors (individually a Canadian Credit Party) and (b) all
of the Capital stock of each Canadian Credit Party owned by another Canadian
Credit Party.
3
The
ABL Revolving 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 ABL Revolving Facility also includes a
covenant to maintain a minimum consolidated fixed charge coverage ratio of 1.00
to 1.00 as of the end of each month while excess availability under the ABL
Revolving Facility is less than the greater of $82.5 million and 15% of total
commitments then in effect, and continuing until excess availability equals or
exceeds such level for 45 consecutive days.
The ABL Revolving 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 ABL
Revolving Facility as senior indebtedness.
From and after the funding date of the ABL Revolving Facility, upon the
occurrence of any event of default, commitments under the ABL Revolving
Facility may be terminated, the loans under the ABL Revolving Facility may be
accelerated and any remedies available under the loan documents may be
exercised.
Capitalized terms used in the
foregoing description and not otherwise defined herein have the respective
meanings ascribed thereto in the ABL Revolving Facility. The foregoing summary of the material terms
of the ABL Revolving Facility does not purport to be complete and is qualified
by reference to the full text of the ABL Revolving 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.
On April 15, 2010, the
Company and certain affiliates entered into the ABL Revolving Facility. 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
|
|
ABL
CREDIT AGREEMENT dated as of April 15, 2010.**
|
**A
portion of Exhibit 10.1 has been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. Omitted material for which confidential
treatment has been requested has been filed separately with the Securities and
Exchange Commission.
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
4
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 Exit Credit Facilities; (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 on Form 10-K
for the year ended December 31, 2009, 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:
|
April
21, 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