EXHIBIT 99
CONTACT: Xxx Xxxxxxxxx
Xxxxx Xxxxxxx
Kekst and Company
(000) 000-0000
FOR IMMEDIATE RELEASE
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JPS TEXTILE GROUP REACHES AGREEMENT FOR RESTRUCTURING
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-- BANK FACILITY EXTENDED FOR OPERATING SUBSIDIARIES --
-- BUSINESS TO CONTINUE AS USUAL --
GREENVILLE, SC, MAY 16, 1997 -- JPS Textile Group announced today that it has
reached an agreement in principle with an unofficial committee of bondholders,
representing more than 60% of its outstanding public debt, to convert 100% of
its long-term debt to equity. The restructuring will take place at the holding
company level only and will not affect the Company's operating subsidiaries, JPS
Converter & Industrial Corp. and JPS Elastomerics Corp., or their relationships
with employees, customers and suppliers.
The agreement is subject to formal documentation, including the preparation of a
definitive reorganization plan and disclosure statement, which the Company
expects to complete shortly. Under the proposed plan, the restructuring will be
effected through a voluntary prenegotiated or prepackaged chapter 11 filing. JPS
Textile's operating subsidiaries would not file for chapter 11 and would
continue to conduct business as usual under the agreed upon plan.
Under the restructuring, JPS Textile's operating subsidiaries will have a new
revolving credit facility, which is expected to have provisions no less
favorable than the existing facility, and will provide significant working
capital for JPS' operating businesses. In the meantime, the Company will
continue to utilize its existing facility, which has been extended through July
16, 1997 in order to enable the Company to complete the documentation necessary
for a prenegotiated or prepackaged chapter 11 filing. If JPS Textile commences a
chapter 11 case by that date, the revolving credit facility will be extended
automatically to the earlier of November 1, 1997 or the effective date of a
reorganization. The agreement also calls for the election of a new Board of
Directors. JPS Textile's management
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team has agreed to enter into new employment agreements in
connection with the restructuring.
Xxxxx X. Xxxxxx, Chairman, President and Chief Executive Officer, commented,
"Following many months of negotiations, we are very pleased to have reached an
agreement that is in the interests of our Company, its employees, customers,
suppliers and investors. Through the creation of a new capital structure, the
restructuring plan will enable JPS Textile to eliminate the public debt incurred
at the time of its 1988 leveraged buyout and alleviate uncertainties associated
with its upcoming debt maturities.
"As a result, JPS Textile will enjoy a stronger balance sheet and will have the
financial resources and flexibility to make strategic capital investments in its
operating business to better position the Company for long-term profitability
and growth. In addition, our management team will be better able to focus its
attention on building our operating businesses, without the distraction of the
debt obligations," Xx. Xxxxxx said.
Under the terms of the agreement, all of JPS Textile's outstanding bond debt
will be exchanged for substantially all the reorganized company's common stock.
Specifically, the holders of JPS Textile's 10.25% senior subordinated notes and
10.85% senior subordinated discount notes will receive approximately $10-$14
million in cash, contingent notes which will be issued by JPS Capital Corp., a
wholly owned subsidiary of JPS Textile, providing payment of up to $33-$37
million plus interest upon the occurrence of certain events, and approximately
93.29% of the new common stock. The holders of the 7% subordinated debentures
will receive approximately 5.95% of the new common stock. JPS Textile's senior
management will receive approximately 0.75% of the new common stock in lieu of
their contractual retention payments.
The face amounts of JPS Textile's current outstanding bond debt are $76,773,000
on its senior subordinated notes; $109,247,000 on its senior subordinated
discount notes; and $54,071,000 on its subordinated debentures.
The agreement in principle also provides that JPS Textile's existing senior
preferred stock will be exchanged for warrants to purchase common stock of the
reorganized company, and JPS Textile's existing junior preferred stock and
common stock will be cancelled.
JPS Textile, with annual revenues of approximately $450 million, is one of the
largest domestic manufacturers of textile and textile related products for the
apparel fabric, industrial and home fashion markets.
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