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[GENERAL CHEMICAL INDUSTRIAL PRODUCTS INC. LOGO OMITTED]
News Release
General Chemical Industrial Products Inc. (ticker: GNMP.OB, exchange: OTC
Bulletin Board)
CONTACT:
David Graziosi
General Chemical
Phone: 973-599-5507
E-mail: dgraziosi@genchem.com
General Chemical Industrial Products Inc. Files Voluntary Petition for
Reorganization Under Chapter 11 Of the U.S. Bankruptcy Code to Facilitate
"Pre-Arranged" Restructuring; Normal Operations to Continue
PARSIPPANY, N.J., Dec. 3, 2003 -- General Chemical Industrial Products Inc.
(the "Company" or "General Chemical") announced that it had filed a voluntary
petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the U.S. Bankruptcy Court for the District of New Jersey to facilitate its
"pre-arranged" restructuring. The Company's subsidiaries and affiliate are
leading producers of soda ash and calcium chloride. General Chemical
emphasized that the Chapter 11 filing does not include any of its operating
subsidiaries, including General Chemical (Soda Ash) Partners and General
Chemical Canada Ltd. As a result, the Company does not expect the filing to
have any adverse effect on its business operations.
General Chemical previously announced that it was in discussions with its senior
secured lender banks and an ad hoc committee of holders of its 10 5/8 percent
Senior Subordinated Notes (the "Notes") relating to a potential financial
reorganization plan (the "Plan"). The Plan proposed by General Chemical, its
senior secured lender banks and an ad hoc committee of holders of its Notes will
allow the Company to significantly deleverage its balance sheet, if the proposed
Plan is approved by the Bankruptcy Court. Certain of the senior secured lender
banks have agreed to provide General Chemical with $17.5 million of
debtor-in-possession financing. These same senior secured lender banks have also
agreed to provide the Company with a $17.5 million credit facility upon its
emergence from the Chapter 11 process. If the proposed Plan is approved, General
Chemical's existing senior secured debt will be replaced with a $45 million term
loan upon its emergence from the Chapter 11 process. The balance of outstanding
obligations including all accrued interest thereon to the senior secured lender
banks will be converted into convertible preferred stock representing
approximately 68 percent of the Company's total equity, upon approval of the
proposed Plan. In addition, the Notes including all
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accrued interest thereon will be converted into common stock representing
approximately 32 percent of General Chemical's total equity, upon approval of
the proposed Plan.
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General Chemical Industrial Products Inc. Files Voluntary Petition for
Reorganization Under Chapter 11 - 2
The Plan does not anticipate the impairment of any other creditor classes, and
the Company intends to honor all of its commercial and contractual commitments.
General Chemical believes that the protection afforded by a Chapter 11 filing
best preserves its ability to continue to serve its customers and preserves the
value and goodwill of its businesses, while it implements a financial
reorganization to deleverage the Company's balance sheet and create an improved
long-term capital structure.
The Company believes that its available cash, continued cash flow from
operations and debtor-in-possession financing should be adequate to fund ongoing
operations and meet all anticipated obligations to customers, vendors and
employees during the Chapter 11 process. The Company expects to continue its
normal worldwide operations without any adverse impact on its ability to serve
customers in North America and overseas.
General Chemical also announced today that, in order to facilitate the financial
restructuring outlined above, it has consolidated its holding company structure
through the merger, effective as of Nov. 26, 2003, of New Hampshire Oak, Inc.
(which held 100 percent of the outstanding equity of General Chemical Industrial
Products Inc.) and The General Chemical Group Inc. (which held 100 percent of
the outstanding equity of New Hampshire Oak, Inc.) into General Chemical
Industrial Products Inc. This step was approved by the respective stockholders
and Board of Directors of the Company, New Hampshire Oak, Inc., and The General
Chemical Group, Inc., the Company's senior secured lender banks and
representatives of the holders of the Notes and is not expected to have any
effect on the Company's operations or on any of its other creditors.
The Company is represented by Debevoise & Plimpton as counsel, Porzio, Bromberg
& Newman, P.C. as bankruptcy counsel, Blake, Cassels & Graydon LLP as Canadian
counsel, Glass & Associates Inc. as financial advisor, and Deloitte & Touche
L.L.P. as accountant and auditor. The senior secured lender banks are
represented by Kelley Drye & Warren LLP as counsel, McMillan Binch LLP as
Canadian counsel, and Loughlin, Meghji & Company as financial advisor. The
ad-hoc group of holders of the Notes is represented by Stroock & Stroock & Lavan
LLP as counsel (Michael Sage (212) 806-6460), Lowenstein Sandler PC as local
counsel, Bennett Jones LLP as Canadian counsel, and Jefferies & Company, Inc.,
as financial advisor (Timothy O'Connor (212) 284-2520).
The Chapter 11 filing excludes General Chemical (Soda Ash) Partners, all
U.S. subsidiaries and all non-U.S. subsidiaries, including General Chemical
Canada Ltd.
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This announcement does not constitute a solicitation for any vote or an offering
of securities. No such solicitation is being made at this time, and will only be
made by means of a Disclosure Statement that has been approved by the Bankruptcy
Court. The Plan is subject to supplementation, modification and amendment prior
to confirmation. The description of the Plan contained herein is qualified in
its entirety by reference to the Plan.
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General Chemical Industrial Products Inc. Files Voluntary Petition for
Reorganization Under Chapter 11 - 3
About General Chemical Industrial Products Inc.
General Chemical's subsidiaries and affiliate are leading producers of soda
ash and calcium chloride. Additional information about the Company and its
products is available online at www.gogenchem.com.
This announcement includes forward-looking statements. General Chemical has
based these forward-looking statements on its current expectations and
projections about future events. Although General Chemical believes that its
assumptions made in connection with the forward-looking statements are
reasonable, no assurances can be given that its assumptions and expectations
will prove to have been correct. These forward-looking statements are subject to
various risks, uncertainties and assumptions. General Chemical undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. In light of these
risks, uncertainties and assumptions, the forward-looking events discussed in
this announcement might not occur.
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