News

Chesapeake has been unable to secure its new $250m (£125m) credit facility with GE Commercial Finance and General Electric Capital Corporation by today's deadline.

However, Chesapeake chief executive Andrew Kohut said the firm's 2004 credit facility with Washovia Bank, which expires next February, would be adequate for its current operating requirements.

The firm said in May that the refinancing of its credit facility would be completed by 30 June, but "several issues" have since arisen, including its entitlement to indemnification for losses in an environmental issue with Fox River, to contribute to the delay.

Chesapeake said the Fox River issue had now been resolved and it was continuing to work towards a refinancing with GE "well before" the 2004 facility expires.

The firm warned that it still intends to sell or close non-core or under-performing assets and "substantial progress" had been made on "several options" that would bring in more than $75m in cash by the end of 2008.

Kohut said Chesapeake was also reviewing its balance sheet, exploring alternatives for reducing debt and improving its capital structure to "better position the company for growth and profitability".

Chesapeake's total debt at 30 March was $543.2m.

Chesapeake, headquartered in Richmond, Virginia, is one of Europe's largest suppliers of folding cartons, leaflets and labels, as well as plastic packaging for niche markets.