| TORRINGTON, Wyo. Holly Sugar
Company agriculturists and management are hitting the countryside in
earnest this week to present their side of the companys bankruptcy
story to growers.
"Were going on the offensive, and going into the country to
talk to our growers," said Roger Hill, president and CEO of Holly
Sugar. "Were taking cash-flow statements and showing our liquidity
to the growers. We do have adequate funding for our beet payments and
other obligations."
Hill said the Chapter 11 filing by Imperial Sugar, Hollys parent
company, was pre-negotiated.
"People forget that," he said. "It means we had
everything lined up before we filed Chapter 11.
"The purpose of the Chapter 11 was to exchange debt for equity.
The bond holders gave up their debt for 98 percent equity in the company.
When this happened, the company faced large tax liabilities, and by filing
Chapter 11, we avoided that.
"Our loans are all in place. We have term loans and cash flow
statements on a weekly basis. Weve made all our grower payments to
date, and weve done exactly what the contracts call for us to do
everywhere. And it is our intent to honor the rest of our contractual
obligations. Our financing is lined up now and after we exit Chapter
11."
As for ensuring growers receive their payments, Hill said Holly is
probably the only company that ever obtained such a high priority for
grower payments.
According to Hill, from the beginning, the company requested that
growers get top priority.
"We got that authority the first day to pay for the 2000
crop," Hill said.
"Were the only company that has a court order that puts the
growers right behind the banks. And those banks have the liens on the
company property," the Lingle, Wyo., native said.
The amendment regarding Administrative Claims has already been filed
and acted on, he said.
(See "Growers
named as administrative claimants"- under the "Reorganization
Discussion" conference link)
Hill noted that growers are always behind the banks, even in their
payment checks. And co-op growers only get paid after the banks and all
other obligations are paid for.
"Were a public company, so all of our information gets aired
out in public," Hill said. "Co-op losses are buried in the beet
payments."
According to Hill, Holly use to recruit growers only in Wyoming, but
responding to grower requests, stations were opened at Mitchell, Morrill,
Gering, Haig, Lyman, Stegall, Bayard and Alliance.
"I believe they wanted competition, and they got a better deal
with us because were there," Hill said.
"At the end of the day, its in the growers hands. Well
stay close to the Holly co-op growers and work with them, but in the
meantime, well continue to run the factories."
Rick Griffith, agriculture manager at the Holly plant in Torrington,
Wyo., said agriculturists are contracting with growers now.
"We have the same contract weve had for the past two
years," Griffith said. "It has the same bonus system and the
same freight. We have room for growers, and anyone interested can call the
office or contact an agriculturist."
Holly Sugar came to the North Platte River Valley in 1926 when it
opened a new factory in Torrington, Wyo. Its grower areas extend from Pine
Bluffs, Wyo., to Alliance.
Imperial Sugar filed for Chapter 11 Jan. 16. Imperials attorney,
William Schwer said the company expects to exit bankruptcy May 2.
Bankruptcy court documents show Imperial has consolidated assets of $1.1
billion and debts of $775.1 million.
When Imperial comes out of bankruptcy, $250 million in debt and the
annual $25 million interest payment will be gone.
"This will help our cash flow and our balance sheet," Hill
said. "Well be one of the strongest companies in the industry when
we come out of this." |