Business

Chesapeake has received more time from its creditors to sort out its financial affairs.

The US-based packaging group has signed a forbearance agreement with its lenders under its $250m senior secured credit facility.

The agreement will allow Chesapeake to postpone its loan payments while it works on a financial restructuring plan.

The firm has been given until 10 December to develop a plan.

Chesapeake president and chief executive Andrew Kohut said the firm was making progress on its financial restructuring in spite of adverse economic conditions in global financial markets.

"The forbearance agreement provides us with additional time to finalise arrangements for the short- and long-term financial liquidity and financial restructuring we need," he said.

Chesapeake shares were delisted from the New York Stock Exchange in October after its market capitalisation fell below $25m for more than the allowed 30-day period.

The firm's subordinated notes holders also formed an ad-hoc committee to discuss financial restructuring alternatives.

If Chesapeake is unable to comply with the forbearance agreement, it could be required to repay all amounts outstanding under the senior secured credit facility and other debts, which would raise substantial doubts about its ability to continue as a going concern.

Chesapeake employs more than 5,000 people across 44 locations in Europe, North America, Africa and Asia.