HILEX POLY ANNOUNCES AGREEMENT TO RESTRUCTURE DEBT
Company Files Pre-Packaged Plan of Reorganization
Substantial Reduction of Company Debt
Suppliers to be Paid in Full
DIP Financing in Place
HARTSVILLE, SOUTH CAROLINA – May 6, 2008 – Hilex Poly Co., LLC, ("Hilex" or "the Company"), the world’s largest plastic bag company, today announced that it has reached an agreement with its lenders to restructure its senior secured debt. Hilex is taking this action to significantly reduce its overall debt and strengthen its balance sheet to better serve its customers and continue its market leadership position in the plastic bag industry. In addition to a substantial reduction in outstanding debt, the plan will reduce annual interest expense and significantly improve cash flow.
To facilitate this agreement, the Company has elected to file a voluntary, pre-packaged Chapter 11 reorganization, which will allow the Company to finalize the restructuring of debt while continuing to operate, business as usual, and serve its customers. This filing was made in the U.S. Bankruptcy Court for the District of Delaware in Wilmington, Delaware.
"Hilex undertook a comprehensive strategic review to evaluate all options for restructuring our balance sheet and, after careful consideration, determined that a pre-packaged filing was in the best interest of all our stakeholders," said David Pastrich, president and chief executive officer of Hilex. "We believe the restructuring will enable us to invest more capital in the business and position Hilex as a more attractive long-term partner for our customers and vendors. We will continue to focus on our industry-leading environmentally friendly solutions including HED degradable bags, Bag-2-Bag in store closed loop recycling systems, and Enviro-Count rack technology."
The filing will not impact day-to-day operations for employees, customers, suppliers and general business operations. It ensures that employee pay and benefits are fully protected, all current and future obligations to its customers are fulfilled, and that suppliers will be paid in full as part of this process.
The Company has also arranged for debtor-in-possession (DIP) financing from GE Capital and Morgan Stanley Senior Funding, Inc., with an initial commitment of $140 million as well as a commitment for robust exit financing.
"This financing provides additional reassurance to employees, customers and suppliers that we can meet all of our ongoing commitments," continued Mr. Pastrich. "The ability to come to a consensual debt-for-equity agreement with our lenders demonstrates our lender's belief in Hilex's business model and their long-term faith in the Company."
Mr. Pastrich concluded, "We look forward to completing our financial restructuring over the course of the next 45-60 days and emerging as a stronger, more financially sound company, well-positioned for the future."
About Hilex Poly Co., LLC (www.hilexpoly.com)
Hilex Poly Co., LLC is an industry leading manufacturer of plastic bag and film products. Focusing primarily on high density polyethylene (HDPE) film products and related services, our products range from bagging systems to agricultural films.
As an industry leader, we have introduced many new products and features into the marketplace. Our patented QuikMate EZ® open feature continues to be the standard for self-opening plastic bags. Other key innovations and patents include specialized bag features and dispensing hardware. All of our products and services are focused on practical solutions in our target markets.
Hilex is a US based company with headquarters in Hartsville, SC, and 11 strategically located manufacturing facilities across the United States which includes the world’s largest plastic bag recycling plant.
Peter Duda / Hallie Bozzi, Weber Shandwick
212-445-8213 / 212-445-8276