Martin Color-Fi Clarification.
As previously reported, because of its failure to make payments to NationsBank due in July and failure to comply with certain conditions and representations in the related loan documents, NationsBank demanded that the Company cure all defaults under the loans but agreed to forebear from exercising its rights and remedies for an indefinite period of time. NationsBank expressed support of the Company's efforts to evaluate and implement financial alternatives.
The Company has been working with its outside professionals to formulate a plan to cure the defaults on and to repay the NationsBank debt. The Company's first line of attack has been to implement the actions discussed in yesterday's release to sell, or cease operations in, its unprofitable business lines in an effort to reduce as much of the NationsBank debt as possible.
The Company presented to NationsBank its plan to restructure its business, to reduce its debt and to pay the remaining debt. The Company had not made payments that were due in August and September. NationsBank responded by declaring all of the Company's loans with NationsBank in default and demanding payment in full of all such loans by October 2, 1998. The total amount owed on these loans is approximately $60 million. The Company does not have the current ability to pay such loans; however, NationsBank has temporarily withdrawn its demand pending receipt and analysis of additional information and a more detailed proposal for restructuring and repayment of the amounts owed to NationsBank. Although the Company is working to present a plan acceptable to NationsBank and is hopeful that its plan will be accepted, there can be no assurances to that effect. If the Company's efforts are not successful, the demand for payment in full may be reinstated at any time.
Martin Color-Fi, Inc. produces polyester fibers and pellets from recycled plastic materials such as soft drink bottles, off-class packaging resins, polyester fiber waste and film waste. The Company uses these materials to produce polyester fibers for a wide range of markets, including automotive fabrics, carpet, apparel, home furnishings, industrial fabrics and construction reinforcement materials. The Company also produces yarns and carpet from synthetic fibers, as well as dyes and pigments. The Company's common stock is traded on The Nasdaq Stock Market (National Market) under the symbol MRCF.
To the extent that the foregoing information refers to matters that may occur in the future, please be aware that such forward-looking statements may differ materially from actual results. Additional information concerning some of the factors that could cause materially different results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997, which is available from the Securities and Exchange Commission's public reference facilities or from the Company's shareholder relations department, and will be included in the Company's Quarterly Report on Form 10-Q for the quarters ended March 29, 1998, and June 28, 1998, which are, or which will be available from the Securities and Exchange Commission's public reference facilities or from the Company's shareholder relations department.
|Printer friendly Cite/link Email Feedback|
|Date:||Oct 1, 1998|
|Previous Article:||Silicom Enters the Japanese Market With Two Unique Products.|
|Next Article:||Brian Lezak Receives Promotion At Kennedy-Wilson's Beverly Hills Headquarters.|