PSC approves sponsor for reorganization plan

Philip Services Corporation (PSC) announced on September 12, 2003 that it selected High River Limited Partnership, an affiliate of Carl C. Icahn, as the winning acquirer pursuant to a plan sponsorship and bidding procedures order previously approved by the US Bankruptcy Court.
Under that proposal, High River, among other things, will provide an exit loan facility of $150-million to the reorganized company and will pay $20-million for a 20 per cent equity interest in the reorganized company on the effective date of a plan of reorganization.

The Board of Directors approved the High River Plan after an auction among several bidders last week and the Bankruptcy Court approved the company to proceed with the High River plan after a hearing this week. Under the plan, entities owned by Carl C. Icahn would own a majority of the outstanding shares of the reorganized company. If the High River plan is ultimately confirmed, the company is expected to emerge from Chapter 11 before year-end 2003.

Houston, Texas-based PSC is an industrial and metals services company with two operating groups: PSC Industrial Services provides industrial cleaning and environmental services and PSC Metals Services delivers scrap charge optimization, inventory management, remote scrap sourcing, by-products services and industrial scrap removal to major industry sectors throughout North America. On June 2, 2003, the company filed for Chapter 11 protection.

During the period prior to confirmation of the plan, the Company expects to continue to operate utilizing a $35-million debtor-in-possession loan facility made available by an Icahn affiliate as well as utilizing, pursuant to agreement, certain cash collateral held by its senior lenders.

According to Robert Knauss, PSC’s principal executive officer and chair the Board, the High River plan starts PSC on the road to recovery and financial stability. He says that the board expects to have sufficient funding to last until the end of the year and, upon confirmation of the plan, the assurance that the company will emerge as an ongoing entity no longer burdened by excess debt and troublesome legacy issues.

For further information, contact Michael Ramirez at 713-625-7047 or mramirez@contactpsc.com

(Also read “The Philip Way” in the August/September 2001 edition of affiliate publication HazMat Management at www.hazmatmag.com)