Borden Chemicals and Plastics Operating Limited Partnership Seeks Court Approval for Additional Postpetition Financing.

Business Editors

GEISMAR, La.--(BUSINESS WIRE)--Nov. 1, 2001

Borden Chemicals and Plastics Operating Limited Partnership (BCP) (OTC:BCPUQ) announced that it filed a motion yesterday with the U.S. Bankruptcy Court for the District of Delaware seeking authorization to obtain additional, secondary postpetition financing from its general partner, BCP Management, Inc. (BCPM), of up to $15 million (plus an additional $10.5 million available only under specific limited circumstances). The motion seeks immediate court approval of up to $10 million in postpetition loans under the Secondary Debtor-in-Possession credit facility (Secondary DIP Facility) and use of cash collateral, pending a final hearing requested to be held no later than November 30, 2001. A hearing on the interim order is requested for November 8, 2001.

As lender under the Secondary DIP Facility, BCPM would hold liens on substantially all of BCP's assets, subordinate only to the liens held by the group of lenders led by Fleet Capital under the debtor-in-possession credit facility approved by final order of the court on July 11, 2001 (Primary DIP Facility). As with the Primary DIP Facility, proceeds from the Secondary DIP Facility would be used for working capital needs and general purposes.

As previously announced, on April 3, 2001, BCP and its subsidiary, BCP Finance Corporation, filed voluntary petitions for protection under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. BCPM and Borden Chemicals and Plastics Limited Partnership, BCP's sole limited partner, were not included in the filings. (Two other separate and distinct entities, Borden, Inc. and its subsidiary, Borden Chemical, Inc., are not related to the filings.)

"Although BCP continues to face challenges, we have made progress in stabilizing the business and moving forward on the restructuring and asset sale process," said Mark Schneider, president and chief executive officer of BCPM. "We have paid down $18 million in debt under the Primary DIP Facility, obtained final court approval of asset sale and bidding procedures, and identified potential purchasers of assets. We also communicated with Fleet today to announce an achievable exit strategy that we believe will result in full payment of BCP's debt under the Primary DIP Facility."

Schneider continued, "Right now we are engaged in serious negotiations with potential purchasers. It is important that BCP maintain liquidity during the sale process. But BCP has experienced a recent tightening of liquidity under the Primary DIP Facility. Under these circumstances and anticipating the normal seasonal slowdown in PVC sales in November and December, BCP sought additional financing from BCPM. We are pleased that BCPM has agreed to provide this new financing."

"To facilitate the sale process and preserve the value of all of BCP's assets, BCPM has agreed to step up and provide this loan," said William H. Carter, chairman of BCPM. "We believe this action is in the best interest of all of BCP's creditors."

Commenting on operations, Schneider said BCP continues to produce PVC resin at all three of its plants. "We appreciate the support that customers, vendors, lenders and employees have shown us over the past seven months as we have worked on the reorganization and asset sale process. We are doing everything we can to achieve a smooth reorganization. This additional financing is intended to enable us to maintain production and service without interruption."

He continued, "To sustain the business, we have reduced the headcount by 30% compared with a year ago and made substantial cost cuts elsewhere. Operations also have benefited from lower raw materials costs, especially for natural gas. However, these factors have not been sufficient to offset a very weak PVC market. Market pricing dropped five cents per pound from the second to the third quarter, and BCP has been operating at 70-75% of capacity.

"Looking ahead," he said, "producers of PVC and PVC pipe have announced price increases, which bodes well for the future. And when demand does come back, the PVC industry's recovery should be swift, since inventories are very low throughout the supply chain."

BCP produces PVC resins at its facilities in Geismar, La., also the site of its headquarters, and has additional PVC operations in Addis, La., and Illiopolis, Ill.

This press release includes forward-looking statements subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Our use of the words "outlook," "intends," "believes," "anticipates," "estimate" and similar words are intended to identify these statements as forward-looking. These forward-looking statements represent our current judgment on what the future holds and are based on a number of assumptions and forecasts. Actual results may be materially different from those expressed or implied by such statements. While BCP Management believes them to be reasonable, a number of important factors could cause actual results to differ materially from those projected. These factors include relatively small changes in PVC resin prices or demand; changes in domestic capacity; changes in raw material and natural gas costs; increased operating costs; loss of business from major customers; availability of post petition financing; negative market and credit impact from the Chapter 11 filing; unanticipated expenses; substantial changes in financial markets; labor unrest; foreign competition; major equipment failure; unanticipated results in pending legal proceedings; and other factors.

Note to Editors: Borden Chemicals and Plastics Operating Limited Partnership (BCP) is a separate and distinct entity from Borden, Inc., and its subsidiary, Borden Chemical, Inc. Please refer to Borden Chemicals and Plastics Operating Limited Partnership as "BCP" or "Borden Chemicals and Plastics," not as "Borden" or "Borden Chemical."