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SUGARLOAF MOUNTAIN CORPORATION ANNOUNCES TERMS OF PROPOSED FINANCIAL RESTRUCTURING PLAN

 SUGARLOAF MOUNTAIN CORPORATION ANNOUNCES TERMS OF PROPOSED
 FINANCIAL RESTRUCTURING PLAN
 CARRABASSETT VALLEY, Maine, Feb. 12 /PRNewswire/ -- Sugarloaf Mountain Corporation, operator of Sugarloaf/USA in Carrabassett Valley, Maine, announced the terms of its proposed financial restructuring plan today. Under the terms of the plan, four members of Sugarloaf's current investor group will provide the company with $3.6 million in new equity funding. The new company will be owned by: Warren Cook, president of Sugarloaf Mountain Corporation, who has pledged the majority of the funds; Boston Concessions Group of Cambridge, Mass., operators of Sugarloaf Food Service; William E. Haggett of Bath, Maine, former chairman of Bath Iron Works; and James M. Seed of Providence, R.I., president of The Astra Projects, Inc.
 Two million dollars of the funding will be used to pay down the company's debt to Fleet Bank; the debt presently totals approximately $8.2 million plus accrued interest. The debt restructuring agreement, which was signed Feb. 3, 1992, also provides for an extension of maturity dates and a reduction in interest rates.
 Approximately $600,000 of the funding will be used to redeem all of the oustanding shares of the company's Class A common stock, Class B common stock and serial preferred stock as well as $900,000 in outstanding subordinated debt, after which the four investors will own 100 percent of the restructured company. Under the proposed plan, holders of the Class B stock would receive a cash payment of 10 cents per share. Holders of the Class A common stock, preferred stock and subordinated debt would receive five cents per dollar invested, plus warrants to purchase stock in the restructured company and a package of resort privileges. The remaining $1 million will be used for working capital and to pay closing costs.
 The plan was approved by the company's board of directors on Feb. 8, 1992, however, the approval of a majority of each class of stockholders is also required. Proxy material has been drafted and sent to the Securities and Exchange Commission for approval, after which it will be circulated to all stockholders in anticipation of a special stockholder meeting in late March. In establishing the redemption prices with the various classes of the company's stock, the board of directors relied, among other things, on a fairness opinion from a nationally recognized investment banking firm with expertise in the ski industry and on an appraisal of the company's assets.
 Completion of this plan will allow the company to reduce its debt to banks and others by approximately $3 million immediately and by another $1 million by the end of the ski season. This reduction, along with the reduction in interest rates, will lower the company's annual interest payments by over $500,000.
 For skiers, the restructuring means that the present management and employee group will remain in place to build on the progress which has been made over the past five years since Cook became president. There will be no disruption in staffing or in programs which might have occurred with totally new ownership.
 "This transaction will keep the company's operations and cash flow stable," said Cook, "and enable us to continue to focus on providing quality snow and quality service. I appreciate the cooperation of the current investor group and of Fleet Bank in the restructuring and have confidence in the future of the resort because of our oustanding group of employees. They have and will make the difference for the company, our homeowners and our guests."
 -0- 2/12/92
 /CONTACT: Warren Cook of Sugarloaf, 207-237-2000 Ext. 6900/ CO: Sugarloaf Mountain Corporation ST: Maine IN: LEI SU: BCY


EG-DD -- NE001 -- 9066 02/12/92 08:00 EST
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Publication:PR Newswire
Date:Feb 12, 1992
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