RICHMOND, Va., March 20 /PRNewswire/ -- Fort James Corporation (NYSE: FJ)
today announced that it has entered into an agreement with Crown Vantage Inc.
related to Crown Vantage's 11.45 percent senior pay-in-kind (PIK) notes due in
2007, which are held by Fort James.
Pursuant to the agreement, Fort James will return $33 million face amount
of the PIK notes to Crown Vantage in exchange for the termination of certain
contractual arrangements and the mutual release of claims that have arisen
from prior inter-company transactions. Additionally, Crown Vantage will be
granted an option to purchase the remaining PIK notes for $80 million in cash.
The option is exercisable until September 30, 1998, and, if exercised, must be
funded by October 31, 1998. The agreement is subject to certain conditions,
including the consent of Crown Vantage lenders.
No charge against Fort James earnings will be required resulting from the
agreement or the execution of the option.
"This is a positive agreement for both Fort James and Crown Vantage,"
noted Miles L. Marsh, Chairman and Chief Executive Officer of Fort James. "We
believe it will give Fort James the ability to monetize the PIK notes more
quickly."
Crown Vantage became an independent company in August 1995, upon the spin-
off of the stock of Crown Vantage by James River Corporation to its
shareholders after contribution of certain assets, liabilities and operations
to the new company. The PIK notes were issued by Crown Vantage to James River
at that time. James River subsequently changed its name to Fort James
Corporation, following its 1997 merger with Fort Howard Corporation.
Fort James is a leading international consumer products company, serving
consumers both at home and away-from-home with bathroom and facial tissue,
paper towels, napkins, and cups and plates. The company's popular brands
include Quilted Northern, Brawny, Dixie, Vanity Fair, Mardi Gras, Green
Forest, Soft 'N Gentle and So-Dri in North America and Lotus, Tenderly,
Colhogar and Kittensoft in Europe. Fort James also produces folding cartons
for packaging food and pharmaceuticals and communications papers such as
printing, publishing and office copy paper. With annual sales of
$7.3 billion, the company has approximately 29,000 employees and more than 65
manufacturing facilities in the U.S., Canada and 10 European countries.
Copies of today's news release, along with additional information on Fort
James, is available, at no charge, by calling 888-526 3711. You may also
access the company's Web site at Internet address http://www.fortjames.com.
SOURCE Fort James Corporation
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Related links:
http://www.fortjames.com
CONTACT:
Financial, Celeste Gunter, 804-649-4307 or
Media, Richard B. Elder, 804-343-4785, both of Fort James
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