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NATIONAL GYPSUM'S PLAN OF REORGANIZATION CONFIRMED BY BANKRUPTCY COURT

 DALLAS, March 9 /PRNewswire/ -- National Gypsum Company's plan of reorganization was confirmed today, permitting the company to begin its exit from protection under Chapter 11 of the U.S. Bankruptcy Code, it was announced by Peter C. Browning, chairman and chief executive officer. The confirmation order was signed by Judge Steven A. Felsenthal, U.S. Bankruptcy Court, Northern District of Texas, Dallas.
 "The Company anticipates completing the requirements necessary to effect the reorganization plan by mid-year at which time consideration will be distributed to creditors as set forth in the plan," Browning stated.
 The Company's plan calls for the assets of National Gypsum's wallboard operations to be transferred to a new National Gypsum Company. The new company will have debt consisting of $100 million principal amount of senior notes with interest payable at 10 percent per annum for a term of 10 years and stockholders' equity consisting of 20 million shares issued, having an estimated value of approximately $12.50 per share or $250 million. In addition, the company will issue warrants for approximately 2.3 million shares of common stock at an exercise price of $14.50 per share. This new capital structure compares with the previous operating company's debt of $1.016 billion and a negative stockholders' equity of $654 million.
 Creditors will receive a combination of either cash, common stock, senior notes or warrants. The common stock and warrants are expected to be traded publicly on NASDAQ. A market is also anticipated for the senior notes although debt is not traded on NASDAQ.
 The old operating company will retain stock of The Austin Company (a wholly-owned engineering and construction services subsidiary of National Gypsum), cash and historical insurance policies, all for the benefit of asbestos claimants.
 The Court previously ruled that current asbestos bodily injury claimants would be channelled to a settlement trust and permanently enjoined from making any claims against the new National Gypsum Company. The Court also previously ruled that it would channel future bodily claims to the trust and approved provisions of the Company's plan under which all outstanding property damage claims will be settled for approximately $137 million.
 "Completion of the Chapter 11 in less than two and one-half years is substantially quicker than other bankruptcies involving asbestos-related claims. Additionally, during the time the company has been in Chapter 11, the company has been in one of the most difficult operating environments in industry history. Yet, we have made substantive operating and structural changes resulting in improved productivity while maintaining excellent employee morale. We believe we have made significant progress in implementing our operating strategy of becoming the absolute lowest-cost producer of the preferred products, quality and services, as determined by our customers," Browning stated.
 "As a result of the Company's reorganization, we have been able to deal fairly and equitably with the asbestos issue and will enjoy a capital structure that is appropriate for our industry. We believe National Gypsum is well positioned to challenge for the industry leadership," Browning said.
 "However, we continue to believe that our industry will experience a slow recovery and will not reach the same levels of volume and pricing in the 1990s that were experienced in the 1970s and 1980s. Nonetheless, we are confidant that our operating strategy will permit the Company to improve its competitive position," Browning concluded.
 National Gypsum has been represented during the Chapter 11 proceedings primarily by Johnson & Gibbs, Dallas, its lead bankruptcy legal counsel; Hoyle, Morris & Kerr, Philadelphia, special asbestos legal counsel; Cadwalader, Wickersham & Taft, Washington, D.C., environmental legal counsel; and Donaldson, Lufkin & Jenrette, New York, investment banking.
 National Gypsum filed for protection under Chapter 11 of the U.S. Bankruptcy Code on Oct. 28, 1990. The Company filed its plan of reorganization on Jan. 15, 1992, and voting on the plan concluded Nov. 20, 1992. Confirmation hearings commenced on Dec. 4, 1992 and concluded on March 3, 1993, when the reorganization plan was confirmed.
 National Gypsum Company is the nation's second largest producer of gypsum wallboard and related products.
 -0- 3/9/93
 /CONTACT: Allan V. Cecil, V.P.-Corporate Communications and Investor Relations, National Gypsum Company, 704-365-7227/


CO: National Gypsum Company ST: Texas, North Carolina IN: CST SU: BCY

SB-MM -- CH008 -- 4499 03/09/93 11:53 EST
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Date:Mar 9, 1993
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