Propex Files for Bankruptcy Protection

Chattanooga, TN, January 18, 2008 – Propex Inc. today announced that it has filed for Chapter 11 bankruptcy.

The company will continue to operate as usual while it restructures.

Propex will also seek court approval for a $60 million credit facility that has been arranged so it can continue operations.

“Today’s steps are part of an important process to strengthen Propex,” said Joe Dana, president of Propex Inc. “We believe the financial reorganization will allow us to implement a restructuring plan that will lower our debt levels and expand our market leadership in key sectors from a position of financial strength.”

The new financing would provide $60 million in immediate liquidity so the company can service its customers and improve operations.

Upon completion, the company expects the restructuring to reduce debt and create additional cash flow that otherwise would be earmarked for debt service.

“During the past year, our entire industry has been hit hard by the general economic decline led by the deteriorating housing market plus the escalating cost of raw materials,” Dana said.

“I am pleased we now have a way forward and appreciate the support of our valued customers, suppliers, lenders and employees.”

The filing only affects Propex’s U.S. operations and does not impact the company’s Latin American and European operations.