EXHIBIT 99.1
CONTACT
Media Inquiries Only: Financial Inquiries only:
Jon Morgan or Michael Freitag Roopesh K. Shah
Kekst and Company Miller Buckfire & Co.
(212) 521-4800 (212) 895-1858
ALLIED HOLDINGS, INC. FILES FOR CHAPTER 11 REORGANIZATION
TO ADDRESS FINANCIAL AND OPERATIONAL CHALLENGES
COMPANY OBTAINS $230 MILLION FINANCING FACILITY
TO SUPPORT CONTINUED OPERATIONS
COMPANY'S OPERATIONS WILL CONTINUE IN NORMAL COURSE
DECATUR, GA., AUGUST 1, 2005 - Allied Holdings, Inc. announced today that, in
order to effect a financial restructuring, the Company and certain of its
operating subsidiaries have filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. The filings were made in the U.S.
Bankruptcy Court for the Northern District of Georgia.
The Company and its subsidiaries are operating at all of its locations and
anticipates that its various distribution and transportation services for the
automotive industry will continue to operate in the normal course of business
during the reorganization process. The Company will pay its vendors under normal
terms for goods and services provided after today's filing.
To help fund its continuing operations during the reorganization, Allied has
secured debtor-in-possession financing in an amount up to $230 million from GE
Commercial Finance, Morgan Stanley Senior Funding, Inc. and Marathon Asset
Management. Subject to court approval, these funds will be available to help
satisfy obligations associated with conducting the Company's business, including
the payment of wages and benefits to active employees and retirees.
Hugh E. Sawyer, Allied Holdings' President and Chief Executive Officer, stated,
"We have made significant progress during the last few years in our efforts to
restructure and streamline our operations, including measures to lower overhead
expenditures, as well as reduce costs across our non-bargaining employee base.
Our more efficient, focused organization has facilitated improvements in damage
free deliveries, organic growth through new business with our customers, and
reinforced the underlying potential of our core transportation services
businesses at our operating subsidiaries. However, these positive developments
have been significantly offset by automotive industry dynamics that continue to
hamper our financial performance, including a sharp decline in new vehicle
production, rising fuel costs, and increasing wage and benefit obligations under
the Allied Automotive Group's master agreement with its Teamster-represented
employees.
"Reorganization under Chapter 11 will provide Allied with an opportunity and the
forum to address these financial challenges, and we are committed to working
cooperatively throughout the process to implement a plan of recovery that serves
the Company, as well as the interests of its creditors, employees, customers,
and suppliers. Our objective is to use this process to redesign our capital
structure in order to lower our debt, reduce the multi-year cost increases
associated with our contract with our Teamster-represented employees, address
certain customer pricing issues, and take steps to improve our financial
performance.
"During this process, we will continue to provide quality service to our loyal
customers," Mr. Sawyer continued. "We believe that the new $230 million credit
facility will provide the opportunity for the Company to continue to operate in
a reliable and stable manner. In addition, our vendors will be paid in full for
all goods and services which are provided to the Company and our subsidiaries
after the filing date.
"We appreciate the ongoing efforts of our employees who have, over the past four
years, made personal sacrifices and maintained their focus through a most
challenging period. We will once again rely upon the dedication and support of
our employees as we work together to build a more promising future for Allied
Holdings."
Allied Holdings' legal advisor is Troutman Sanders, LLP. The Company's financial
advisor is Miller Buckfire & Co., LLC.
MORE INFORMATION ABOUT ALLIED'S REORGANIZATION IS AVAILABLE ON THE COMPANY'S
WEBSITE AT WWW.ALLIEDHOLDINGS.COM.
About Allied Holdings
Allied Holdings, Inc. is the parent company of several subsidiaries engaged in
providing distribution and transportation services of new and used vehicles to
the automotive industry. The services of Allied's subsidiaries span the finished
vehicle continuum, and include car-hauling, intramodal transport, inspection,
accessorization and dealer prep. Allied, through its subsidiaries, is the
leading company in North America specializing in the delivery of new and used
vehicles.
Statements in this press release that are not strictly historical are "forward
looking" statements. Such statements include, without limitations, any
statements containing the words "believe," "anticipate," "estimate," "expect,"
"intend," "plan," "seek," and similar expressions. Investors are cautioned that
such statements, including statements regarding Its restructuring, the Company's
ability to maintain normal operations during the reorganization and the outcome
of reorganization proceedings. Without limitation, these risks and uncertainties
include approval of a plan of reorganization by the Bankruptcy Court, the
Company's ability to successfully implement a reorganization plan, the outcome
of reorganization proceedings, economic recessions or extended or more severe
downturns in new vehicle production or sales, the highly competitive nature of
the automotive distribution industry, the ability of the Company to comply with
the terms of its debtor-in-possession financing facility, the ability of the
Company to obtain financing in the future and the Company's highly leveraged
financial position. Investors are urged to carefully review and consider the
various disclosures made by the Company in this press release and in the
Company's reports filed with the Securities and Exchange Commission.