Chesapeake to sell US operations

6 January 2009


The US based Chesapeake Corp is to sell all of its operating businesses to a group of investors who intend to continue operating them as a going concern. To consummate the sale, Chesapeake and its US operating subsidiaries filed voluntary Chapter 11 petitions in the Eastern District of Virginia in Richmond.

The proposed aggregate purchase price is $485 mn. The transaction is subject to the approval of the Bankruptcy Court and the satisfaction of specified closing conditions.

The company’s non-US subsidiaries are not included in the deal and there are no plans to place them in administration.

Andrew J Kohut, president and CEO of Chesapeake, explains: "After exploring a range of possible alternatives to improve our balance sheet and maintain the liquidity we need to operate our businesses in an extremely difficult economic environment, the management and directors concluded that a court supervised sale of our business operations is in the best interest of the company and its stakeholders. The sale will help us meet several critical objectives, including allowing on-going operation of all of our businesses without interruption to supplier and customer relationships, providing the most rapid path to a new organisation with a much healthier balance sheet, and providing a bright future for our operating companies and their employees, customers and suppliers."

Chesapeake has filed a variety of first day motions with the Court that will allow it to continue to conduct business as usual while it completes the sale of the business operations to the investor group, which includes affiliates of Irving Place Capital Management and Oaktree Capital Management.

Chesapeake is one of Europe's premier suppliers of folding cartons, leaflets and labels, as well as plastic packaging for niche markets. The company has 44 locations and approximately 5,400 employees worldwide.




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Chesapeake Corp



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