Chesapeake Corp. (CSKE), a specialty packaging manufacturer, will seek court approval Monday to auction off its assets and to continue borrowing on a $37.1 million loan while it works to sell its business.
Buyout firms Irving Place Capital Management L.P. and Oaktree Capital Management L.P. have agreed to buy Chesapeake for about $485 million, subject to higher bids at auction. The firms plan to keep the company's doors open and run the business as a going concern upon completion of the sale.
Chesapeake will ask the Richmond bankruptcy court Monday to sign off on the Chapter 11 auction rules. The company wants to conduct an auction by Feb. 23.
Chesapeake filed for Chapter 11 protection last month, unable to pay the interest on its debt of more than $520 million. In court papers, Chief Executive Andrew J. Kohut said the company paid about $50 million in interest a year on its debt.
Chesapeake began in 1918 as a pulp and paper mill in West Point, Va., and grew into a publicly traded paper and packaging operation. The company is based in Richmond, but most of its operations are overseas. It employs 5,400 people worldwide in Europe, North America, Africa and Asia.
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