United States / Canada | One of the world's largest paper and packaging recycling organisations Smurfit-Stone has filed a Chapter 11 procedure at the US Bankruptcy Court in Wilmington, Delaware. At the same time, its Canadian subsidiary has filed to reorganise under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice. '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,' explains Chairman and CEO Patrick Moore.The US papermaker and recycler listed US$ 5.6 billion in consolidated debt and US$ 7.5 billion in consolidated assets as of September 30 last year. Mr Moore adds: 'Our financial performance has not reflected the full potential of our earnings power due to higher-cost operations and burdensome debt levels dating back to the original formation of the company. As a result of our three-year transformation programme, we have been focused on improving our operating performance and our operations are now well invested and far more cost-effective.'
Smurfit-Stone is North America's second-largest maker of corrugated packaging and employs 22 000 people in the USA, Canada, Mexico and Asia, according to its website. The company plans to use this reorganisation process to 'restructure its debt', resulting in a capital structure more suited to support its long-term growth and profitability, it states in a release. Its day-to-day operations will continue without interruption.
Operations outside the USA and Canada are excluded from the process, the company points out.
