| The parent company of Holly Sugar Corp., which has sugar
refineries in Sidney, Worland and Torrington, Wyo., filed for Chapter 11
bankruptcy protection in Delaware Tuesday.
The petition included a pre-filing negotiation with the creditors of
Imperial Sugar Co., which would relieve it of $250 million in debt.
Imperial officials hope to complete the reorganization by Sept. 30.
Hollys district manager in Sidney said the action would leave the
company in stronger financial condition.
As for the sugar operation in Sidney, It will be business as usual,
said Don Gorsek. Anything else I might say would be speculation.
In a press release from its headquarters in Sugar Land, Texas, Imperial
said it would continue to meet its commitments to its employees and
contracts with its customers. It asked the courts permission to pay its
necessary ongoing suppliers and trade creditors their prepetition claims.
Imperial Sugar Co. is the countrys largest processor and marketer of
refined sugar.
The 157-year-old company struggled throughout 2000 with depressed
commodity prices and a glut of sugar. It also blamed high energy prices
for inflating costs, particularly in California, where it is active.
The plan has received strong support from our banks and bondholders,
said James C. Kempner, president and chief executive officer. The
elimination of $250 million of debt will (improve) 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, Kempner said. We continue to rely
on the commitment and support of our valued employees. The bankruptcy
plan relieves the company of $250 million in debt by transferring company
stock to the creditors. That also eliminates interest on the debt.
A year ago, there were persistent rumors that Imperial was on the verge
of filing for bankruptcy, rumors that the company vociferously denied.
In May last year in an interview with The Billings Gazette, Holly
President Roger Hill said the rumors were unfounded and had no substance.
We have made all our bank payments, Hill said at the time.
Efforts Tuesday to speak with Hill, who happened to be in Billings,
were unsuccessful.
The U.S. sugar market has gone from bad to worse in recent months.
Sugar worth hundreds of millions of dollars has been forfeited to the U.S.
government as the market price sank below the loan price for the
commodity.
The British firm Tate & Lyle, the parent company of the Western
Sugar Co., is in the process of selling Western to a farmer co-op. Western
has sugar plants in Billings and Lovell, Wyo. Tate & Lyle, the worlds
largest sweetener company, is in the process of divesting itself of its
U.S. entities as a means to stem its losses.
Hollys farmers in mid-December announced that they, too, would
explore the possibility of buying its sugar operations.
For its fiscal year, which ended Sept. 30, Imperial registered a net
loss of $34.7 million, compared with a net loss of $18.1 million the
previous fiscal year.
Trading of Imperial shares on the American Stock Exchange has been
halted since the company first suggested in mid-December that it might
file for bankruptcy. It last traded at 81 cents, down from a 52-week high
of $4.06 last January.
Imperial sells sugar under its own brand name as well as Dixie
Crystals, Spreckels, Pioneer, Holly, Diamond Crystal and Wholesome
Sweeteners brands. |