Smurfit Kappa seeks to extend credit facilities

The listed company’s proposed amendments would extend a portion of the group’s EUR600m revolving credit facility by one year to December 2013.

Doing so would lengthen the company’s term of its debt and give it greater financial flexibility in the coming years.

According to the company, a number of its non-bank lenders have already confirmed their support for the proposed amendments.

Smurfit Kappa chief financial officer Ian Curley said: “These initiatives are part of an ongoing process of effective capital management.

“The proposed amendments provide Smurfit Kappa with significantly enhanced financial flexibility, to focus on delivering industry-leading operating performance and maximising free cashflow generation for continued net debt reduction.”

Smurfit Kappa was created in 2005 through the merger of Jefferson Smurfit Group with Kappa Packaging when “debt levels and interest costs were not the issue they are now”, according to financial consultant Tim Rothwell.

Rothwell was keen to highlight the fact Smurfit Kappa has done a “pretty decent job in running thier business as efficiently as possible in maximising cashflow”.

He said: “This does emphasise that the industy is extremely difficult and I do not see any signs of things improving and heavily indebted companies are suffering more than most.”

Smurfit Kappa Group operates across 22 European countries and nine in Latin America.

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