Refinancing for Graham Packaging

Graham Packaging Company, a worldwide provider in the design, manufacture and sale of customised blow-moulded plastic containers, has announced that it is to sell stocks in its wholly-owned subsidiary, GPC Capital to a maximum value of $250 million (€271m). The measure has been taken in order to stem the company's increasing debt load.

All of the shares will be primary shares sold by the issuer. The offering is part of a refinancing plan designed to reduce and extend the maturities of Graham Packaging's long-term debt, reduce interest expense and improve financial flexibility.

Graham Packaging expects to use net proceeds from the offering plus proceeds from new debts to repurchase and refinance certain existing debts. The offering will be lead managed by Deutsche Bank Securities.

Graham Packaging Holdings Company is currently 85 per cent owned by affiliates of The Blackstone Group, certain members of management and an institutional investor and 15 per cent owned by members of the Graham family.

Graham Packaging is also conducting an internal reorganisation in which GPC Capital will change its name to Graham Packaging Company and exchange newly issued shares of its common stock for all of the partnership interests. Upon the exchange, Graham Packaging Holdings Company will liquidate and all of its assets will be transferred to Graham Packaging Company.

Graham Packaging has 55 plants throughout North America, Europe and Latin America.