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[PIONEER LOGO]
PRESS RELEASE
Contact: Philip J. Ablove (713) 570-3200
PIONEER ANNOUNCES FURTHER INTEREST PAYMENT DELAYS
Houston, Texas (January 5, 2001) - Pioneer Companies, Inc. [PIONA -
NASDAQ] today announced that its subsidiary, Pioneer Corporation of America, did
not make principal payments that were due on December 28, 2000 on its two
classes of floating rate term notes issued in 1997. As previously announced,
Pioneer has also delayed interest payments that are due on its Senior Secured
9 1/4% Notes due June 2007.
Pioneer also announced that, in light of current economic uncertainties
relating to the price of power and the effects on the Company's markets of
possibly slowing growth of the domestic economy, it has terminated discussions
with respect to a short-term credit facility and is developing a more
comprehensive financial restructuring program, for which it will solicit the
consent of its lenders at the earliest practical time.
Pioneer has engaged Wasserstein Perella & Co., Inc. to assist it in
developing the plan, obtaining necessary consents and securing any necessary
financing. It has also retained Weil Gotshal & Manges as special restructuring
counsel.
Pioneer again emphasized that it is continuing to pay its vendors in
the ordinary course of business, and that it continues to have positive cash
flow from operations despite very high power prices that are affecting costs and
volume. Michael J. Ferris, President and Chief
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Executive Officer, said, "Economic uncertainty for 2001 has increased the risk
to our business plan and it is not certain, if business conditions significantly
worsen, that the anticipated short-term financing would have been adequate.
Accordingly, we believe it is prudent to focus our efforts on a fundamental
restructuring of our debt, which will provide us with a better base for the
conduct of Pioneer's business. We have substantial cash flow from operations, a
strong base of assets, a solid customer base, and a dedicated work force. We
believe that these factors will support the restructuring. We intend to complete
the necessary financial transactions as rapidly as possible, while continuing to
concentrate on operating Pioneer's business."
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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