Philip Services Corporation Receives DIP Financing

Philip Services Corp. announced that the US Bankruptcy Court for the Southern District of Texas has approved a commitment for $35 million in debtor-in-possession loan facility from an affiliate of Icahn Associates Corp.

The DIP financing availability is effective immediately and will remain in place until a plan of reorganization is confirmed by the court, the Company sells its assets under Section 363 of the Bankruptcy Code, or Dec. 31, 2003, whichever occurs first.

The company and 43 of its subsidiaries filed for protection under Chapter 11 on June 2, 2003. The DIP financing along with existing consensual use of cash collateral held by a senior secured lender will enable the Company to continue normal operations during the reorganization proceedings.

At the same time, the Company agreed to a proposed "stalking horse" plan of reorganization with another affiliate of Icahn Associates Corp. and filed a notice of opportunity for other third parties to submit alternative reorganization plans or purchase assets under Section 363.

The company will solicit alternative plan proposals as well as bids for all or defined parts of the company's assets until Aug. 29. Thereafter, the company will select, and the Court will hold hearings to confirm, the highest and best proposal. The "stalking horse" proposal also contains certain rights to a break up fee of $5 million and up to $1 million in expense reimbursement if the Icahn Associates affiliate is not the prevailing bidder.