Owens-Illinois plans debt reduction through sale of packaging business

By Susanna Moon

Chicago, June 11 - Owens-Illinois, Inc. plans to redeem some of its senior secured debt due 2009, 2011 and 2012, according to a press release.

Funding for the redemption will come from the company's sale of its plastics packaging business to Rexam plc for $1.825 billion in cash.

The bulk of the proceeds will be used to reduce the debt due 2009, 2011 and 2012.

The company has entered a definitive agreement. The deal is expected to close early in the third quarter.

Goldman, Sachs & Co. is the company's financial adviser.

"This sale and the subsequent debt reduction will give us greater operating flexibility and allow us to better focus resources to improve our core glass business," Al Stroucken, Owens-Illinois's chairman and chief executive officer, said in the press release.

Owens-Illinois is a Toledo, Ohio-based manufacturer of glass containers, plastic health care packaging and plastic closure systems.

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