Constar raises IPO

Constar International, the US manufacturer of plastic drinks bottles, has increased the size of its proposed initial public stock offering to 16 million shares and cut the price to a range of each share.

Constar International, which produces plastic drinks bottles, has increased the size of its proposed initial public stock offering to 16 million shares and cut the price to a range of each share.

The Philadelphia-based company, a unit of packaging giant Crown Cork & Seal, announced in early July that it planned to sell 8.8 million shares at $14 to $16 each. It now wants to sell the shares at between $12 to $15.

Constar said Crown would be selling its entire stake and receiving all the proceeds, which could amount to as much as $240 million (€246.7m).

The changes in size and price of the IPO were disclosed in an amended prospectus filed with the Securities and Exchange Commission.

The Constar IPO is the latest money-raising strategy from beverage can king Crown Cork, which is struggling with a heavy debt load and weak market conditions.

"Upon the completion of this offering, Crown will not own any shares of our common stock," Constar said in the prospectus.

Salomon Smith Barney is the sole manager for the IPO and has an option to buy an additional 2.4 million shares from Constar to cover over-allotments.

Constar said it would receive all proceeds from the sale of over-allotment shares.

Constar, whose top 2001 customers included Anheuser-Busch, Coca-Cola and PepsiCo, filed to go public on 23 May.

In March, Crown Cork agreed to sell its pharmaceutical packing business as it tried to pay down debts, which stood at $4.79 billion at the end of the first quarter, compared with $5.35 billion a year earlier.

Constar also plans to enter into a credit facility consisting of a $150 million seven-year term loan and a $100 million five-year revolving loan facility.

Constar said it will use the money from the note sales and loan arrangements to repay debt to Crown.