CCAA Court Approves Philip Services' Financial Reorganization.

HAMILTON, Ontario--(BUSINESS WIRE)--Nov. 26, 1999--

Philip Services Corp. (TSE:PHV.) (ME:PHV.) today announced that Mr. Justice Blair of the Ontario Superior Court of Justice has sanctioned the Company's Amended and Restated Plan of Compromise and Arrangement ("the Canadian Plan") under the Companies Creditors' Arrangement Act ("CCAA").

The implementation of Philip's Canadian Plan will occur shortly after its U.S. Plan of Reorganization (the "U.S. Plan") is confirmed under Chapter 11 of the U.S. Bankruptcy Code. The Company is finalizing the terms of its exit working capital facility, which is the last step before seeking confirmation of its U.S. Plan. Upon implementation of its Canadian Plan, Philip will transfer ownership of its Canadian subsidiaries as a going concern to two new Canadian companies, Philip Services Inc. and Philip Analytical Services Inc. Philip will continue to operate and grow its Canadian businesses under these new legal entities.

"This is an important step for our Company and our Canadian operations," said Anthony Fernandes, President and Chief Executive Officer. "We have delivered on our commitment to provide consistent quality and service to our clients throughout this process, due to the skill and dedication of our employees. Our new Canadian companies will be supported by a strong balance sheet, working capital, and our steadfast commitment to their growth."

Through the financial reorganization, Philip will reduce its secured debt from US$1 billion to US$250 million and US$100 million in convertible payment-in-kind notes. The Company will also eliminate over US$140 million in unsecured debt in return for US$48 million in payment-in-kind notes and US$18 million in convertible payment-in-kind notes.

Upon final Plan implementation, 24 million shares will be issued by Philip Services (Delaware), Inc. on a pro rata basis to its secured lenders, unsecured creditors, existing shareholders, class action claimants, and other equity claimants, as set forth in the Company's Plan. Shareholders of the Company on the date of implementation of the Plan will receive their pro rata share of 480,000 common shares of the restructured Company, or one common share for every 273 common shares held. There are currently 131 million shares of the Company issued and outstanding.

Philip Services is an integrated metals recovery and industrial services company with operations throughout the United States, Canada and Europe. Philip provides diversified metals services, together with by-products management and industrial outsourcing services, to all major industry sectors.