Caraustar Industries granted final approval of $75 million DIP loan

By Caroline Salls

Pittsburgh, June 25 - Caraustar Industries, Inc. received final court approval of its $75 million in debtor-in-possession financing from General Electric Capital Corp., according to a Thursday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.

Proceeds from the DIP facility will be used for cash collateralizing outstanding letters of credit, for paying for goods and services and for general corporate purposes.

The DIP facility will mature on the earliest of nine months from closing, the date the company prepays the DIP loans, the closing date of a sale of substantially all company assets, upon confirmation of a plan of reorganization not approved by the lenders and the earlier of the effective date of a plan that has been approved by the lenders or 60 days after confirmation of that plan.

Interest will be Libor plus 450 basis points.

Caraustar, an Austell, Ga.-based manufacturer of recycled paperboard and converted paperboard products, filed for bankruptcy on May 31. Its Chapter 11 case number is 09-73830.

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