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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CROWN VANTAGE ANNOUNCES AMENDED LETTER OF INTENT;
OPEN BIDDING BEGINS
Auction Date Set for Crown Paper Asset Sale
CINCINNATI, August 18, 2000--Crown Vantage Inc. (OTC Bulletin Board: CVANQ) and
its wholly-owned subsidiary Crown Paper Co., announced today that Crown Paper
signed a revised Letter of Intent with Crown Acquisition Corporation ("CAC") for
the sale to CAC or its designee (the "Purchaser") of substantially all of the
assets of Crown Paper, amending the terms of an earlier Letter of Intent between
Crown Paper and CAC, and that it obtained approval of the United States
Bankruptcy Court for the Northern District of California of the Letter of Intent
and bidding procedures for competing offers.
Under the terms of the revised Letter of Intent, the consideration for the
acquisition of the assets to be purchased is $337.0 milion in cash, a
subordinated note issuance to Crown Paper of $24 million (of which $10 million
may be exchanged for cash), the assumption (or cash payment in lieu of
assumption) of approximately $39 million of industrial development bonds, an
option for Crown Paper to purchase at the closing 10% of the equity of the
Purchaser, and seven year warrants to purchase 5% of the equity of the Purchaser
at an exercise price of three times the price being paid by such co-investors.
In addition, if the Purchaser subsequently sells certain assets above a
threshhold level, under certain specific conditions, Crown Paper will be
entitled to share in the proceeds of any such sale. The Purchaser has also
agreed to assume certain liabilities of Crown Paper arising after the filing of
the Chapter 11 case.
The equity investors in the Purchaser will include the principals of NLK
Consultants Inc. and institutional investors. NLK Consultants Inc. is a company
that provides a full range of consulting, engineering, marketing, research and
strategic analysis services to the pulp and paper industry worldwide.
Bob Olah, CEO of Crown Vantage and Crown Paper, commented:
"We are very pleased with having received court approval of our
proposed bidding procedures. This puts us on track to close a
transaction in the fourth quarter of this year. Putting the sale
process behind us will enable us to focus on our business and our
customers."
The acquisition, which would occur as a sale of assets under section 363 of the
Bankruptcy Code, is subject to, among other things, the negotiation and
execution of a definitive asset purchase agreement, due diligence and financing.
The sale is also subject to the receipt of higher or better offers and to
Bankruptcy Court approval. The bidding procedures approved by the Bankruptcy
Court contemplate that, if a higher bid is received, an auction will be held on
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October 3, 2000. Initial overbids are required to provide consideration in an
amount at least $11 million higher than CAC's consideration and subsequent bids
are to be made in increments of at least $1 million. The Bankruptcy Court has
also set a hearing date of October 6, 2000, for approval of the sale.
Rothschild Inc., is the financial advisor to Crown Vantage and Crown Paper in
the transaction. Crown Vantage is one of the world's leading manufacturers of
value-added papers for printing, publishing and specialty packaging. With nine
mills internationally, the Company has capacity to manufacturer more than
750,000 tons of specialty papers per year. The Company's diverse products are
tailored for the special needs of target markets. End users include specialty
magazines and catalogs, financial printing and corporate communications,
packaging and product labels, coffee filters and disposable medical garments--
and hundreds more. For more information, visit www.crownvantage.com.
Safe Harbor Statement: This news release contains certain forward-looking
statement concerning Crown Vantage's positioning for the future. As required by
the Private Securities Litigation Reform Act of 1995, the company advises that
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those stated or inferred.
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