Smurfit in €250m debt pay down

PAPER and packaging giant, Smurfit Kappa Group (SKG) has extended its debt maturity profile to over five years, in a move which management sees as enhancing the company’s financial flexibility.

The Dublin-headquartered international packaging specialist announced, yesterday, the completion of a €250 million five-year trade receivables securitisation programme, the proceeds of which will go towards refinancing SKG’s existing €210m securitisation programme — which has a September 2011 maturity — and repaying a portion of bank debt when fully drawn.

SKG’s chief financial officer, Ian Curley, said management’s continuing financial priority is debt reduction and de-leveraging. “We’re pleased to have successfully completed this five-year securitisation programme, which highlights our proactive debt capital structure management.

“This transaction extends our long-term debt maturity profile and contributes to the diversity of our funding sources, thereby further enhancing our overall financial flexibility,” he added.

Smurfit Kappa significantly reduced its net debt — during the third quarter of the year — by €168m, to bring it down to €3.1bn and managed to reduce its net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) ratio to 3.7x. The group added, yesterday, that this move extends its debt maturity profile to 5.4 years, “at a very competitive cost, thereby further strengthening its debt capital structure”.

It added that it now has no material debt maturity before December 2013.