ACL files for Chapter 11
ACL said that its ability to operate normally will not be affected by the reorganization. It has requested and expects to receive court permission to continue to pay employee salaries, wages and benefits and pay suppliers for the post-petition delivery of goods and services. ACL reiterated that its top priority remains providing customers with safe, reliable and on-time delivery service.
Michael C. Hagan, president and CEO of ACL, said, "This is an important step for ACL to resolve its financial challenges, put the company on firm financial footing and emerge stronger, more competitive and better able to withstand market fluctuations. During this process, we will work with our stakeholders to develop a plan to reduce our debt, as well as examine all aspects of our operations to ensure we are utilizing our assets in the best possible way. Our operating priorities remain unchanged: safety of life and limb, safety of environment, safety of equipment and providing the highest quality service to our customers at the lowest possible cost. ACL is a strong company with a great heritage and outstanding people. We believe that the outcome of this process will provide us with a solid foundation for our future success."
ACL reported that in conjunction with its filing, it has arranged commitments for up to $75 million in debtor-in-possession ("DIP") financing from a group of banks led by JPMorgan Chase Bank. In addition to normal cash flow from operations, the DIP financing helps ensure that ACL has sufficient liquidity to continue normal operations. ACL is committed to serve its customers and pay post-petition vendors in the normal course.
Over the past year, ACL says it has faced a number of unprecedented challenges that have resulted in the need to restructure its balance sheet. These challenges include the general economic slowdown and global economic recession, unforeseen continuing declining barge rates in 2002, lower commodity shipping volumes, excess barging capacity, and a ten week strike at the Company's shipyard. Given these and other factors, ACL determined that its current debt burden is too high and that a restructuring under Chapter 11 offered ACL the most viable opportunity to reduce its debt while continuing operations.
As of December 27, 2002, ACL had assets of $814 million and liabilities of $769 million. The Company said that over the coming months, it will work with all of its stakeholders on the development of a plan of reorganization that will be filed with the court at a later date. The Company's legal counsel is Baker & Daniels of Indianapolis, Indiana, and its financial advisors are Richard Weingarten & Company, Inc. and Huron Consulting Group LLC.
ABOUT AMERICAN COMMERCIAL LINES LLC
ACL is a wholly owned subsidiary of Danielson Holding Corporation (Amex: DHC). ACL is an integrated marine transportation and service company operating approximately 5,000 barges and 200 towboats on the inland waterways of North and South America. ACL transports more than 70 million tons of freight annually. Additionally, ACL operates marine construction, repair and service facilities and river terminals.
DHC is an American Stock Exchange listed company, engaging in the financial services, specialty insurance and marine transportation businesses through its subsidiaries. In connection with efforts to preserve DHC's net operating tax loss carryforwards, DHC has imposed restrictions on the ability of holders of five percent or more of DHC common stock to transfer the common stock owned by them and to acquire additional common stock, as well as the ability of others to become five percent stockholders as a result of transfers of DHC's common stock