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Cone Mills Files Chapter 11 Approves Purchase Offer From WL Ross

Cone Mills Files Chapter 11,Approves Purchase Offer From WL RossCone Mills Corp., Greensboro, N.C., has filed a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code. The filing was made as a condition of a $90 million purchase offer tendered by Wilbur L. Ross Jr., chairman and CEO of New York City-based WL RossandCo. LLC, and approved by Cone Mills Board of Directors. Subject to Bankruptcy Court approval and higher and better offers, the transaction is expected to close before the end of this year.The offer comes on the heels of Bankruptcy Court approval of WL Rosss bid to acquire Burlington Industries Inc., also based in Greensboro (See Textile World News, TW, September 2003).This transaction is the best available option for the companys customers, employees and communities, said John L. Bakane, CEO, Cone Mills. WL Ross is a well-financed strategic buyer with the means and incentive to strengthen our business. By joining forces with WL RossandCo., we will be much better positioned to meet the enormous challenge of low-cost imports while remaining an important employer in the textile industry.Cone Mills has been buffeted by the recent surge of Asian imports, price deflation and the sluggish US economy. The company expects the deal to allow it to improve its global competitive position, as well as to continue US manufacturing operations.To this end, the company also will reconfigure its denim operations, downsizing denim manufacturing at the Cliffside Weave plant and closing the Cliffside Finishing and Haynes plants, all located in Rutherford County, N.C. The action affects approximately 625 employees. The steps are necessary in order for the company to remain competitive in an environment where unfair trade policies are decimating the US textile industry, said Bakane. Our current operating strategy of consolidation and rationalization will help us meet the challenge posed by this unprecedented onslaught of cheap imports. These employees have worked very hard to adapt to changing and competitive conditions. We regret the personal impact this will have on our employees and their families as well as the economic effect it will have on the Rutherford County community.Despite the reconfiguration, Cone expects to maintain a substantial number of manufacturing jobs in the United States. In addition to its US operations, the company operates Parras Cone, a profitable Mexican denim-manufacturing facility, jointly with CompaIndustrial de Parras (See Parras Turns 10, TW, this issue). November 2003