| SUGAR LAND, TX, January 16, 2001 -- Imperial Sugar Company (AMEX:IHK)
today announced that it has filed a petition for relief under chapter 11
of the U.S. Bankruptcy Code in the District of Delaware. The Company's
proposed plan of reorganization ("Plan") has been pre-negotiated
by the Company with the lenders under its Senior Credit Agreement
("Lenders") and an ad hoc committee representing a majority in
amount of its 9 % Senior Subordinated Notes due 2007
("Notes"). Under a pre-negotiated chapter 11 filing, the
pre-filing negotiations and agreements seek to enable a company to achieve
chapter 11 reorganization more rapidly and at less cost than a traditional
filing. The reorganization proceeding is expected to be completed within
the Company's fiscal year ending September 30, 2001.
The Company has requested Bankruptcy Court approval to be allowed to
pay its necessary on-going suppliers and trade creditors their
pre-petition claims. Imperial Sugar will continue to meet its commitments
to its employees, and contracts with its customers will remain in effect.
It is contemplated that Imperial Sugar Company will continue under its
current management both during the pendency of the reorganization as well
as following its completion.
The Plan provides that, upon consummation, current holders of the Notes
and certain other unsecured creditors will receive 98.0% of the common
equity in a restructured entity. Current holders of the common equity of
the Company will receive 2.0% of the common equity in the restructured
entity and 7-year warrants to purchase an additional 10.0% of the
restructured entity on a fully-diluted basis. These ownership percentages
exclude shares issuable upon the exercise of options granted in connection
with the Company's long-term management incentive plan.
James C. Kempner, President and CEO of Imperial Sugar said, "The
Plan has received strong support from our banks and bondholders. The
elimination of $250.0 million of debt will delever our balance sheet,
greatly enhancing the financial and competitive strength of the Company.
Under the Plan, we expect no disruptions to our operations as we continue
to fulfill obligations to our necessary on-going suppliers and trade
creditors, as well as providing the high level of service our customers
have come to expect from Imperial Sugar and its other operating companies.
We continue to rely on the commitment and support of our valued
employees."
Imperial Sugar also announced that it has agreed with the Lenders for
up to $85.0 million in debtor-in-possession ("DIP") financing,
of which up to $50.0 million is available after March 31, 2001. In certain
circumstances, availability under the DIP facility will replace amounts
repaid on the pre-petition revolving credit facility. The Company believes
that the DIP facility will provide adequate financing to meet the
Company's working capital and operational needs during the pendency of the
case. Availability to borrow under the DIP facility when aggregated with
liquidity at the time of filing was approximately $50.0 million. In
addition, the Company has agreed with the Lenders on the terms of a
commitment to provide $307.0 million of exit financing, of which $157.3
million will be available for revolving credit purposes and the remainder
for term loans that existed at filing. The DIP financing, which is subject
to the approval of the Bankruptcy Court, will enable the Company to
continue normal operations during the restructuring proceeding. The exit
financing will be used to finance the Company's future working capital and
operational requirements. The Company's $110.0 million revolving
receivables purchase facility continues through the pendency of the
reorganization. The Company believes it can replace the facility with
other receivables-backed financing upon consummation of the Plan.
Imperial Sugar Company is the largest processor and marketer of refined
sugar in the United States and a major distributor to the foodservice
market. The Company markets its products nationally under the Imperial,
Dixie Crystals, Spreckels, Pioneer, Holly, Diamond Crystal
and Wholesome Sweeteners brands. Additional information about Imperial
Sugar may be found on its web site at www.imperialsugar.com
.
Statements regarding the Company's ability to complete its
reorganization proceedings timely, the outcome of the reorganization plan,
the Company's ability to sustain current operations during the pendency of
the reorganization including its ability to maintain normal relationships
with customers, the ability of the Company to establish normal terms and
conditions with suppliers and vendors, costs of the reorganization
process, the adequacy of financing arrangements during the reorganization
period, future market prices, operating results, synergies, sugarbeet
acreage, future operating efficiencies, cost saving and other statements
which are not historical facts contained in this release are
forward-looking statements that involve certain risks, uncertainties and
assumptions. These include, but are not limited to, the results of the
bankruptcy proceedings, court decisions and actions, the negotiating
positions of various constituencies, the results of negotiations, market
factors, the effect of weather and economic conditions, farm and trade
policy, the ability of the Company to realize planned cost savings, the
available supply of sugar, available quantity and quality of sugarbeets
and other factors detailed in the Company's Securities and Exchange
Commission filings. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual
outcomes may vary materially from those indicated.
Contact:
Mark Q. Huggins
Managing Director and
Chief Financial Officer
(281) 490-9587
Investor Relations:
Morgen-Walke Associates
Gordon McCoun, Jeffrey Zack
Media Contact: Stacey Nield
(212) 850-5600 |