Spartech Corp., a major producer of plastic sheet, compounds and packaging products, has altered its financial obligations to allow it to sell non-core assets.
Clayton, Mo.-based Spartech announced the move in a July 23 news release. Few details were provided, but officials said the firm amended its bank credit facility and senior notes to provide additional flexibility.
These actions allow for additional restructuring activities and eliminate restrictions on the sale of assets, officials added.
We are pleased that our financial partners agreed to reduce some of the restrictions included in our financing agreements, said Randy Martin, Spartech's executive vice president and chief financial officer, in the release.
Earlier this year, Spartech cut 260 jobs and closed part of a sheet extrusion plant in Donchery, France. In 2008, the firm cut 440 jobs and closed a sheet plant in Mankato, Minn., and a compounding plant in St. Clair, Mich.
Like many plastics firms, Spartech has struggled with reduced demand for its products and high raw material costs.
Spartech posted a loss of $1.3 million in the first half of its fiscal 2009, which ended May 2.
The firm's sales fell 31 percent to $483 million in that period vs. the same period in fiscal 2008. For full fiscal 2008, Spartech lost $192 million on sales of $1.4 billion. The July 23 release also had no details of which businesses Spartech might sell.
The firm's three largest business units, based on second-quarter sales, are custom sheet and rollstock (45 percent), color and specialty compounds (24 percent) and packaging technologies (22 percent).
In profit, however, packaging technologies led the way with 47 percent of second-quarter operating profit, with custom sheet and rollstock at 20 percent and color and specialty compounds at less than 13 percent of the total.
Spartech's per-share stock price began the year around $6 and fell under $2 in March, but had hit $11.40 in late trading July 23.
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