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700 LOUISIANA STREET FAX 713 225-6475
SUITE 4300 TELEPHONE: 713 570-3200
HOUSTON, TEXAS 77002
[PIONEER LOGO]
PRESS RELEASE
Contact: Philip J. Ablove (713) 570-3200
PIONEER ANNOUNCES INTEREST PAYMENT DELAY
Houston, Texas (December 15, 2000) - Pioneer Companies, Inc. [PIONA -
NASDAQ] today announced that its subsidiary, Pioneer Corporation of America, is
delaying the payment of interest due on December 15, 2000 on its 9 1/4% Notes
due June 2007. Pioneer further announced that it has entered into discussions
with an institutional investor with respect to a three-year credit facility of
up to $35 million subject to specified conditions, including documentation. If
consummated within thirty days, the new financing will enable Pioneer to pay the
delayed interest within the grace period allowed by the Notes. A condition of
the commitment would be that the holders of Pioneer's Senior Indebtedness
provide necessary consents, and Pioneer would meet with such holders as soon as
possible to obtain those consents. If the financing is not arranged or the
consents are not obtained, Pioneer will seek a restructuring of the Senior
Indebtedness. Pioneer has engaged Credit Suisse First Boston to assist it in
securing the financing, obtaining the consents and developing and concluding the
transaction.
Pioneer emphasized that it is continuing to pay its vendors in the
ordinary course of business and that it does not expect that its commercial
operations will be affected by the delay in the interest payment. Pioneer noted
that it had a positive cash flow from operations through September 30, 2000
despite very high power prices that affected costs and volume.
Michael J. Ferris, President and CEO, said, "It is unfortunate that
dramatically higher power costs, immediately following the worst year for the
industry in its history, have strained Pioneer's resources despite the recovery
in ECU values. However, we have substantial cash flow from operations, a strong
base of assets, a solid customer base, and a dedicated work force. It is
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these factors that should enable us to attract new capital. We intend to
complete the necessary financial transactions as rapidly as possible, and to
return our emphasis to operations."
Pioneer, based in Houston, Texas, manufactures chlorine, caustic soda,
hydrochloric acid and related products used in a variety of applications,
including water treatment, plastics, pulp and paper, detergents, agricultural
chemicals, pharmaceuticals and medical disinfectants. The Company owns and
operates five chlor-alkali plants and several downstream manufacturing
facilities in North America. Current financial information and press releases of
Pioneer Companies, Inc. can be obtained from its Internet web site at
www.piona.com.
Certain statements in this news release are "forward-looking statements"
within the meaning of the Securities Litigation Reform Act. Forward-looking
statements relate to matters that are not historical facts. Such statements
involve risks and uncertainties, including, but not limited to, the Company's
high financial leverage, global economic conditions, Company and industry
production volumes, competitive prices, the cyclical nature of the markets for
many of the Company's products and raw materials, and other risks and
uncertainties described in the Company's filings with the Securities and
Exchange Commission. Actual outcomes may vary materially from those indicated by
the forward-looking statements.
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