Imperial Sugar Company Announces Refinancing of Credit Agreements, Sale of Subsidiary and Adoption of Shareholders Rights Plan
Thursday January 2, 9:32 am ET
SUGAR LAND, Texas--(BUSINESS WIRE)--Jan. 2, 2003--Imperial Sugar Company (OTCBB:IPSU - News) announced today that following completion of the recently announced sale of its subsidiary, Diamond Crystal Brands ("DCB"), to Hormel Foods Corporation for $115 million in cash, it has refinanced its existing bank agreement and accounts receivable securitization facility with a new group of lenders. The company also announced that its Board of Directors adopted a shareholder rights plan to protect company shareholders from coercive or unfair takeover techniques.
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The new bank agreement and the sale of DCB are the culmination of efforts to strengthen the company's financial position by reducing debt and providing adequate liquidity to fund its operating initiatives. It follows a dedicated campaign by company management to reduce debt through these actions as well as prior sales of other subsidiaries, certain production facilities and non-core assets. In the past 16 months, the company's debt and other financing obligations have been reduced by $258 million. As a result, total debt outstanding was down to approximately $50 million on Dec. 31, 2002.
"Our long-term plans for Imperial Sugar are to build upon its strong relationships with industrial and supermarket accounts," said Robert A. Peiser, president and CEO of Imperial Sugar. "Our two primary retail brands, Imperial and Dixie Crystals, are by far the most recognized brands in the Southwest and Southeast, respectively, and we will continue to build on their customer loyalty. We have assembled a very strong management team, which is dedicated to creating value by becoming an even more responsive and creative supplier to our industrial and retail customers. Equally important, we have made tremendous strides in the past few months restructuring the company's financial position."
The new bank agreement, led by Bank of America, N.A. and General Electric Capital Corporation provides for a three-year $140 million revolving credit facility and a three-year $35 million term loan. It is designed to provide sufficient liquidity for the company's working capital requirements, long-term financing needs and certain letter of credit requirements. At closing, the $35 million term loan was drawn down but no borrowings were made under the revolving credit.
"I am very pleased with the confidence expressed in the company by our new lenders and equally pleased with the make-up of our current capital structure," Peiser continued. "We are now positioned to focus on and invest in our operating initiatives."
Imperial Sugar was advised by Banc of America Securities LLC with respect to both its recapitalization efforts and the sale of its DCB subsidiary to Hormel.
The shareholder rights plan provides for a dividend distribution of one Right for each outstanding share of common stock to holders of record at the close of business on Jan. 15, 2003. The plan would be triggered if an acquiring party accumulates 15 percent or more of the company's common stock (or if a currently existing 15 percent shareholder increases its ownership by more than 10 percent of its ownership as of the adoption of the plan), and would entitle holders of the Rights to purchase either the company's stock or shares in an acquiring entity at half of market value. The Board of Directors would generally be entitled to redeem the Rights at $.01 per Right at any time until the tenth day following the time the rights become exercisable. The Rights will expire on Dec. 31, 2012.
"The adoption of the Rights Plan is a means of safeguarding against abusive takeover tactics and is designed to enable all Imperial Sugar shareholders to realize the long-term value of their investment in its common stock," commented Peiser. "Our Board of Directors believes the Rights Plan represents a sound and reasonable means of safeguarding the interests of the company's shareholders. It is similar to those adopted by over 2,000 other companies. Details of the new Rights Plan will be outlined in the company's Form 8-K filing with the SEC and in a letter to shareholders."
About Imperial Sugar
The Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States and a major distributor to the foodservice market. Imperial Sugar is a name recognized and trusted in the food industry for more than 150 years, as the company's history dates back to the mid-1800s. With packaging and refining facilities across the nation, the Company markets products nationally under the Imperial®, Dixie Crystals®, Spreckels®, Pioneer®, Holly® and Wholesome Sweeteners(TM) brands. Additional information about Imperial Sugar may be found on its Web site at www.imperialsugar.com.
Statements regarding future market prices and margins, future operating results, sugarbeet acreage, future operating efficiencies, future government and legislative action, cost savings, the future status of financing arrangements, liquidity and ability to finance our operations, proposed sales of assets or businesses and other statements which are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, market factors, energy costs, the effect of weather and economic conditions, farm and trade policy, the ability of the Company to realize planned cost savings, the available supply of sugar, available quantity and quality of sugarbeets, court decisions and actions, the results of negotiations, actual or threatened acts of terrorism or armed hostilities, legislative and administrative actions and other factors detailed in the Company's Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
Contact:
Pierpont Communications, Inc., Houston
Sally Ramsay, 713/627-2223 ext. 102
sramsay@piercom.com
Source: Imperial Sugar Company
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