Court Approves Sale of Geismar, La., PVC Facility of Borden Chemicals and Plastics Operating L.P.; Court Also Approves Sale of Ethylene Contracts and Extension of DIP Financing.

Business Editors

GEISMAR, La.--(BUSINESS WIRE)--Aug. 20, 2002

Borden Chemicals and Plastics Operating Limited Partnership (BCP) announced today that the United States Bankruptcy Court for the District of Delaware has approved the sale of BCP's Geismar, La., polyvinyl chloride (PVC) facility to Geismar Vinyls Corporation (GVC), an affiliate of The Westlake Group, for $5 million cash plus a promissory note for up to $4 million depending on the earnings performance of the assets.

Under the sale agreement, Geismar Vinyls will acquire BCP's 575-million lb./year Geismar PVC resins plant, 650-million lb./year ethylene-based vinyl chloride monomer (VCM/E) feedstock plant, and certain related assets. BCP halted PVC production at Geismar in April. The closing date for the sale is dependent on the finalization of a number of related agreements, including environmental agreements between the parties and the Environmental Protection Agency.

The Westlake Group, headquartered in Houston, Texas, is a privately held supplier of vinyls, olefins, plastics and fabricated products to the international marketplace.

BCP also announced that the court has approved the sale to Georgia Gulf Corporation of certain contracts between BCP and Shell Chemical Company and its affiliates related to Shell's supply of ethylene to BCP's Geismar facility. Under the terms of the approved sale agreement, Georgia Gulf will pay BCP $3.2 million in cash for the ethylene contracts and an additional $10.4 million to Shell for certain pre-petition and post-petition cures related to the contracts.

"We are very happy with the court approval of the sale agreement for the Geismar plant and with the auction results for the ethylene contracts," said Mark J. Schneider, BCPM president and chief executive officer. "With these actions, we are nearing the end of the complex process of realizing value for our assets. Despite a difficult market and economic environment, we have achieved a favorable resolution."

BCP said that the court also had approved the extension of its post-petition credit arrangement with BCPM through September 30 in the amount of $8.0 million. The court had previously approved an interim extension of $4.5 million of that facility through August 19.

BCP and its subsidiary, BCP Finance Corporation, filed voluntary petitions for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on April 3, 2001. Borden Chemicals and Plastics Limited Partnership (BCPLP), the limited partner of BCP, was not included in the Chapter 11 filings. (A separate and distinct entity, Borden Chemical, Inc., is not related to the filings.)

Note to Editors: Borden Chemicals and Plastics Operating Limited Partnership (BCP) is a separate and distinct entity from 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 Chemicals."

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. Our actual results may be materially different from those expressed or implied by such statements. While BCPM 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.