Propex Files For Chapter 11 Reorganization

Propex Inc., Chattanooga, Tenn., a manufacturer of fibers and fabrics for geosynthetic, concrete, industrial and furnishing applications, has applied for protection under Chapter 11 of the US Bankruptcy Code to enable it to restructure its US operations. The company also seeks bankruptcy court approval of a $60 million credit facility to enable it to continue operating while it is under Chapter 11 protection.

“Today’s steps are part of an important process to strengthen Propex,” said Joe Dana, president, Propex. “We believe the financial reorganization will allow us to implement a restructuring plan that will lower our debt levels and expand our market leadership in key sectors from a position of financial strength.”

Dana noted the recent downturn of the housing market and increasing raw materials costs have contributed to the company’s, as well as the entire industry’s, economic troubles. “I am pleased we now have a way forward and appreciate the support of our valued customers, suppliers, lenders and employees,” he added.

Coming into existence in late 2004 as the result of the acquisition of London-based BP subsidiary Amoco Fabrics and Fibers by a group of investors and its renaming as Propex Fabrics Inc., the company initially focused on the production of carpet backing and man-made-fiber fabrics used in bedding, furniture, automotive, geotextile and other industrial fabric applications. The company expanded in late 2005 with the acquisition of SI Concrete Systems Corp. and SI Geosolutions Corp., former business units of Chickamauga, Ga.-based SI Corp.

Propex also has a global presence, with operations located in Germany, the United Kingdom, Hungary, Brazil and Mexico. Those operations are not included in the restructuring effort.

January 22, 2008