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Thermatrix Files for Protection Under Chapter 11; Action Necessary To Deter Asset Stripping Pending Debt Settlement
Business Wire, Dec 29, 1999
Business Editors & Environmental Writers
KNOXVILLE, Tenn.--(BUSINESS WIRE)--Dec. 29, 1999 -- Thermatrix Inc. (OTC:TMXI.OB) announced today its election to undertake a reorganization under Chapter 11 of the US Bankruptcy Code to protect its business, customers, suppliers, employees, and shareholders' investments.
The Company believes that the appointment of administrative receivers in the UK by Wexford Management LLC, on December 15, 1999, while engaged in ongoing negotiations over arrangements to repay, by March 31, 2000, the $5.7 million debt assumed by Thermatrix with the acquisition of Wahlco Environmental Systems, Inc. earlier this year, leaves it with no alternative but to seek protection while implementing its previously announced debt restructuring plan. That plan, which is at an advanced state, is based on a combination of a new and larger credit facility, income associated with a strategic technology agreement, as well as the sale of selected assets, and will result in the settlement of the Wexford debt in the Chapter 11 proceeding.
"We are taking this carefully considered step to permit the previously announced debt restructuring of the Company to proceed unhindered," said John T. Schofield, Chairman, President and Chief Executive Officer. "We have worked diligently to integrate Wahlco Environmental Systems, Inc. into Thermatrix. As a result, the Company is poised to achieve a solid, profitable performance in FY2000, supported by a record backlog and high credibility with its customers, both domestically and overseas. The last seven days have seen a series of actions arising from the appointment of administrative receivers in the UK by Wexford that threaten the very basis of shareholder value, customer service and employee loyalty. As a result we have adopted this most prudent course of action as the appropriate response to the circumstances the Company is facing. This action is essential to preserve the integrity of the business, as well as meet our commitments to all constituent parties with whom the Company trades," he said.
Thermatrix is an industrial company primarily serving the global market of continuously operating facilities for a variety of industries that include the refining, chemical, steel, pharmaceutical, pulp and paper, electric utilities, co-generation plants, and industrial manufacturers. Thermatrix provides a number of air pollution control solutions, including its unique flameless thermal oxidation technology, as well as a wide range of engineered products and services. Thermatrix is currently focusing its development activities on the application of its flameless thermal oxidation technology to treat emissions from diesel engines, both mobile and stationary.
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Actual results could differ materially from those projected due to various factors including the filing of the Chapter 11 proceeding, the successful closing of new orders, the actions taken by the administrative receivers, the outcome of discussions with the current senior debt holder, the potential sale of or mortgage of property, as well as the risk factors reported in Form 10-K/A (Commission File No. 0-20819) and such other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated events.
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