Chesapeake seeks flexibility with refinancing plan

The proposed refinancing plan is expected to fully repay the company’s existing $250m (£126m) senior-secured credit facility and to exchange the company’s outstanding subordinated notes for new debt and equity securities.

Chesapeake president and chief executive Andrew Kohut said the refinancing plan would provide “the financial flexibility” the company needed to execute its “long-term business plan”.

“We are confident that we will be successful in our more comprehensive approach to our refinancing needs,” said Kohut.

The Virginia-headquartered company has enlisted the help of global professional services firm Alvarez & Marsal LLP on a consultancy basis.

“We expect to move quickly with this refinancing plan and are focussed on serving our customers during the seasonal peak of our year,” said Kohut.

In December 2007, Chesapeake agreed with its lenders to amend certain covenants of its senior revolving credit facility.

Last month it announced that it would increase its sale prices by approximately 10%, as the company continues to be “squeezed from all sides” by rising raw material and energy prices.

Chesapeake has 45 locations in Europe, North America, Africa and Asia and employs approximately 5,400 people worldwide.

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