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CMI Debt Rstructuring

From: ASAP

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CMI Industries, Inc. announced today that the Company and its subsidiaries commenced voluntary chapter 11 cases in the United States Bankruptcy Court in Wilmington, Delaware for the purpose of implementing a previously announced restructuring agreement with its largest creditors. Pursuant to the Company's chapter 11 plan, which was filed together with the Company's voluntary petitions for relief, the Company's unsecured creditors will receive substantially all of the proceeds from the liquidation of CMI's non-operating assets, $38.375 million in new promissory notes and an indirect 100% ownership interest in the Company's Elastic Fabrics of America LLC subsidiary ("Elastics"). If an acceptable proposal for the purchase of the Elastics business is received during the pendency of the chapter 11 cases, creditors will receive the proceeds from the sale of Elastics in lieu of the new notes and equity. CMI has hired the investment bank, SunTrust Robinson Humphrey as financial advisor to the Elastics business. All Elastics' operations will continue as usual without interruption during the pendency of the chapter 11 cases. In that regard, the Company has obtained a new debtor-in-possession credit facility in the amount of $10 million to ensure that all of Elastics' working capital requirements are satisfied. The Company also anticipates obtaining special bankruptcy court authorization to honor all obligations to Elastics' employees, vendors and customers in the ordinary course of business. In addition, the Company's chapter 11 plan specifically provides that all Elastics' creditors will be paid in full in compliance with the terms of existing arrangements or agreements and without any impairment whatsoever.

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