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Stone sets restructuring
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October 27, 1997: 12:02 p.m. ET
Container maker selling Canadian operations to cut debt by $1.5 B
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NEW YORK (CNNfn) - Stone Container Corp., which makes a variety of paper container products, said Monday it is selling its Canadian operations and pulp businesses as part of a restructuring plan it says will reduce debt by more than $1.5 billion.
Assets of Stone Container Canada Inc. include a Quebec pulp mill and 50 percent interest in Canadian box maker MacMillan-Bathurst.
Stone also plans to sell pulp manufacturing operations in Panama City, Fla.; Port Wentworth, Ga.; and Bathurst, New Brunswick, Canada. Employees and facilities at those locations would merge with Stone's containerboard operations already in place at those sites.
The pulp manufacturing sale still needs approval from the company's board of directors. There was no word on when they might meet to consider the plan.
Stone has retained CIBC Wood Gundy Capital, a division of Canadian Imperial Bank of Commerce, to handle the sale of its Canadian unit.
The Chicago-based company also said it is exploring the sale of other assets.
"This repositioning of our company focuses our operations exclusively in our unbleached paper and packaging business... We believe these transactions will substantially enhance shareholder value and are in keeping with our commitment to improve our balance sheet," said Roger Stone, the company's chairman, president and chief executive officer.
In addition to reducing debt, the company said the restructuring will improve capital structure and debt-leverage ratios and improve cash flow and earnings by reducing interest payments.
--From staff writer Cyrus Afzali
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