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Guilford Mills39 Reorganization Plan Takes Effect

Guilford Mills, Inc. announced that its previously-confirmed plan of reorganization became effective today (October 4, 2002). The announcement marks the Company's swift emergence from bankruptcy proceedings, which commenced only 6 1/2 months ago.The bankruptcy court had approved Guilford Mills' reorganization plan on September 19, 2002, after the Company's creditors and stockholders had voted overwhelmingly to accept it.Emerging from bankruptcy, Guilford Mills now has senior debt of approximately $145 million, down from $270 million when it entered the proceedings. The senior debt consists primarily of a three-year revolving credit facility and a three-year term loan. The Company's suppliers are being paid in full. Guilford Mills' senior lenders now own 90% of the Company's equity."I spent a few days after the court's September 19 approval visiting with many of our 3,500 associates, thanking them for their tireless efforts to bring this reorganization to a successful conclusion," said John A. Emrich, Guilford Mills' President and Chief Executive Officer. "I saw a work force that is fired up and ready to take on the world. I'm very excited about what we're going to accomplish over the next year."Today, the effective date of the reorganization plan, all shares of Guilford Mills' existing common stock ("Old Common Stock"), will be cancelled, and the Company will issue its new common stock ("New Common Stock"): 90% to its senior lenders and 10% to its existing common stockholders pro rata.The record date under the plan of reorganization for determining the existing common stockholders who are entitled to receive shares of New Common Stock is the close of business on October 3, 2002. After the record date, the Company is not required to recognize or process any further changes in the holders of Old Common Stock.Shares of New Common Stock will be issued to record holders at a ratio of approximately one (1) share of New Common Stock for every 34.776338 shares of Old Common Stock. No fractional shares of New Common Stock, or cash in lieu thereof, will be issued to a holder. Instead, fractions of one-half or greater will be rounded to the next higher whole number and fractions of less than one-half will be rounded to the next lower whole number. All shares of Old Common Stock will be automatically cancelled.The issuance and distribution of shares of New Common Stock, which will be processed by the Company's transfer agent, American Stock TransferandTrust Company, will take place as soon as possible. Shareholders need not return their Old Common Stock certificates or take any other actions in order to receive shares of New Common Stock. The Company expects that there will be approximately 5.5 million shares of New Common Stock outstanding immediately following the issuance under the plan of reorganization.New Common Stock will be quoted on the OTC Bulletin Board ("OTCBB") initially under a new ticker symbol "GMILV," and within several days, the symbol will change to "GMIL." The Old Common Stock will cease to be quoted.Guilford Mills and its domestic subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on March 13, 2002. The Company had exited several businesses over the previous year to focus on its strongest operations: automotive, technical textiles and select apparel businesses. The bankruptcy reorganization allowed Guilford Mills to reduce its debt to a level more appropriate for its new size.Copyright PR Newswire 2002