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Wilmington, DE/August 22, 2003/ -- Welspun India Ltd. has identified itself as a potential bidder for Pilloxtex assets. The company is among the parties to a U.S. bankruptcy court hearing scheduled to be in session late Wednesday that is considering, among other things, bidding procedures for Pillowtex’s assets.

Chief Judge Peter Walsh was set to hear the motions — and objections — to the procedures for the proposed qualifications of bidders and the auction process itself, tentatively set for Sept. 10. But Welspun, identifying itself as potential bidder interested in buying at least some Pillowtex brands and possibly continuing operations at some of Pillowtex's operations, says it needs more time.

“Welspun is currently preparing to take steps proposed in the motion to become a qualified bidder,” the company said in papers filed earlier with the court. “However, it is unlikely Welspun will be able to fully comply with the sale procedures set forth … and complete its due diligence prior to the deadlines proposed in the motion.”

The proposed bid deadline is Sept. 4. Welspun argues that the burdens imposed by the proposed bidding procedures “would actually operate to limit the number of potential bidders. It follows that the proposed bidding procedures will prohibit the debtors from maximizing the realizable value of the assets for the benefit of the debtors’ estates and other interested parties.” The company, as a result, is seeking to have the deadline extended another 30 days.

Welspun is the first industry-related company to publicly acknowledge its interest in purchasing Pillowtex’s assets following that company’s recent Chapter 11 filing. Springs Industries and Homestead Textiles had earlier expressed interest but never consummated the deal.

Since the filing, GGST LLC, a venture formed for the buyout, has bid $56 million for Pillowtex’s assets. Approval of those terms, in lieu of a successful competitive bid by another entity in an auction, is also pending before the court.

Update August 23, 2003

BANKRUPTCY COURT DELAYS P'TEX DECISIONS

A federal bankruptcy court judge has put off at least until next Thursday a series of decisions on how Pillowtex's assets will be sold off. U.S. District Judge Peter Walsh considered a series of motions during a hearing yesterday to approve the procedures for bidding, the auction and the contingency sale to GGST LLC - along with multiple objections. Several challenges were filed to the unusually quick timing of the bidding and auction process.

Pillowtex's current proposal and agreement with GGST — still subject to court approval — calls for competitive, qualified and irrevocable bids to be filed by Sept. 4 with an auction, if any, slated for Sept. 10.

Some parties to the procedure complained in court papers that the terms and timing of the bidding process seem to discourage bidding and give GGST an inside advantage. Welspun India Ltd. and others complained that the proposed timetable would prevent it from conducting adequate due diligence to come up with a bid for specific assets.

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