Propex Gets Approval To Use Loan for Operations

Chattanooga, TN, February 14, 2008--Propex Inc. won final court approval Wednesday to use all of its $60 million loan to keep its manufacturing business operational during its Chapter 11 bankruptcy case.

After giving the company approval to use $20 million of that loan several weeks ago, Judge John C. Cook of the U.S. Bankruptcy Court in Chattanooga approved the financing deal Wednesday.

Led by bank BNP Paribas, several lenders will provide the financing package. BNP also led Propex’s pre-bankruptcy lenders, who are owed a total of $230 million.

Propex also received approval to use up to $8 million to repay the claims of about 75 key vendors.

"The debtors believe that the critical vendors will be unwilling to continue to supply them with the vital raw materials, parts and services if they are not paid their undisputed pre-petition amounts owed them," Propex said in court papers.

The vendors provide everything from repair services for the company's machines to the raw materials needed to manufacture Propex products.

Propex filed for bankruptcy on Jan. 18.