Smurfit-Stone Container Corp. has sold its Brewton, Ala., mill assets to Georgia-Pacific Brewton LLC for approximately $355 million. The Brewton mill has annual production capacity of approximately 300,000 tons of white top linerboard and 190,000 tons of solid bleached sulfate.
“The sale of the Brewton mill will allow us to more fully focus our resources on delivering innovative products and services to our customers in our containerboard, corrugated container, and recycling operations,” says Patrick Moore, Smurfit-Stone chairman and ceo. “Net proceeds from the sale will be used for debt reduction to further improve our financial flexibility, an important goal of our strategy.”
Substantially all of the proceeds from the $355 million sale will be applied directly to debt reduction, which will save the company approximately $23 million in annualized interest expense.
The sale will result in a pre-tax loss of approximately $70 million, which reflects the allocation of $146 million of goodwill to this operation. The company expects to record an after-tax loss of approximately $100 million related to the transaction, reflecting a provision for income taxes higher than the statutory income tax rate because of the non-deductibility of goodwill.
Thursday, November 01, 2007
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