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