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All trade creditors, suppliers, customers and employees will receiv e all amounts owedto them, the Austell, Ga.-based recycledf paperboard and packaging company It will ask the U.S. Bankruptcyy Court for the Northern District of Georgiza for approval to pay the amounts in the ordinar y courseof business. Caraustar (NASDAQ: CSAR) also reache agreement with debt holders to reducesthe company's debt obligations by $135 Under the Plan, holders of outstanding shares of Caraustar'es common stock will receivw their pro rata share of $2.9 or 10 cents a subject to certain conditions. The restructuring plan calls for the exchange ofthe company'ws existing 7.375 percent and 7.
25 percent senior notes for an aggregater of $85 million in new senior securefd notes and 100 percent of the commonm stock of the reorganized company. will become the company's controllinhg shareholder. In conjunction with the Caraustar has landeda $75 million debtor-in-possession line of credit from Generalo Electric Capital Corp. The money may be used for cash collateralizinb outstanding lettersof credit, paying for goodz and services in the ordinaru course of the busineszs and general corporate purposes. "Caraustar took decisive action to substantiallyt reducethe company's debt and prospectively reduce said President and CEO Michaep J. Keough, in a statement.
“Oncee our financial restructuringis complete, we believe Caraustar'ds new capital structure combined with the cost savinge achieved by operating as a private entity will providr a lean and flexible foundation for sustainable profitability and bettedr position the company to meet the challenges of our industryg and this recessionary economy head The company posted a net loss of $4.4 millio in the first quarter of 2009 and had a $99 milliob loss in 2008.
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