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Press Release
FOR IMMEDIATE RELEASE Contact: Martha A. Buckley
Foamex International Inc.
(610) 859-2952
FOAMEX RESOLVES 'CHANGE OF CONTROL' ISSUE
Reaches Agreement with The Bank of Nova Scotia
for Orderly Transition of Pledged Stock
LINWOOD, PENNSYLVANIA, July 31, 2000 - Foamex International Inc. (Nasdaq:
FMXI), the leading manufacturer of flexible polyurethane and advanced polymer
foam products, announced today that it has reached an agreement with The Bank of
Nova Scotia relating to the shares of Foamex Common Stock pledged to the Bank by
an affiliate of Trace International Holdings, Inc., which is in bankruptcy. The
agreement provides for a transfer of the Foamex shares pledged to the Bank which
avoids triggering the "change of control" provisions in the Foamex subsidiaries'
credit agreements and the indentures for their public debt.
Under the agreement, the Bank will become the owner of less than 25% of
the outstanding shares of Foamex Common Stock. The remainder of the Foamex
Common Stock pledged to the Bank will be exchanged for a new class of Non-Voting
Convertible Preferred Stock of Foamex. The Non-Voting Preferred Stock will not
be entitled to dividends unless Common Stock dividends are declared.
These transactions are conditioned upon a settlement agreement between the
Bank and the Trustee for Trace being approved by the U.S. Bankruptcy Court for
the Southern District of New York. Upon completion of the transaction, Trace
will no longer own any shares of Foamex Common Stock.
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Jack Johnson, President and Chief Executive Officer of Foamex, stated, "We
are extremely pleased by the successful resolution of the "change of control"
issue that was created by the Trace bankruptcy. We are especially grateful to
The Bank of Nova Scotia for working so diligently with us to effect a solution
that is positive for all parties. We believe that completion of this transaction
will instill greater confidence in Foamex by our customers, suppliers, creditors
and shareholders."
Foamex, headquartered in Linwood, Pennsylvania, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The company also manufactures high-performance polymers for
diverse applications in the industrial, aerospace, electronics and computer
industries as well as filtration and acoustical applications for the home.
Revenues for 1999 were $1.3 billion. For more information visit the Foamex web
site at http://www.foamex.com.
This press release contains forward-looking information, and actual
results may materially vary from those expressed or implied herein. Factors that
could affect these results include those mentioned in the Company's reports
filed with the Securities and Exchange Commission.
