Sterling Chemicals, Inc. Files Voluntary Chapter 11 Petition

Sterling Chemicals, Inc. Files Voluntary Chapter 11 Petition

On July 16, 2001, Sterling Chemicals Holdings, Inc. announced that the Company and its U.S. subsidiaries have filed voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code to facilitate a financial restructuring.

The Company’s operating subsidiaries in Canada, including Sterling Pulp Chemicals, Ltd., and its operations in Australia and Barbados are not included in and will be largely unaffected by the filing.

The Chapter 11 filings were driven by the Company’s inability to meet its funded debt obligations over the long term, largely brought about by higher raw material and energy costs and by weak demand for petrochemicals caused by the recent declines in worldwide general economic conditions. The Chapter 11 filings will allow the Company to access

additional working capital and significantly reduce its overall debt, while continuing to operate its business in the ordinary course and in compliance with its long-standing commitment to the health and safety of its employees and the communities in which it operates.

In conjunction with the filing, the Company has received commitments for debtor-inpossession (DIP) financing from a group of lenders, which will be used to fund postpetition operating expenses and employee and supplier obligations in the United States. During the restructuring period and beyond, we will continue our commitment to provide the highest quality products and service that our customers have come to expect. Our daily operations will continue as usual without interruption and our suppliers will be paid for all supplies furnished and services rendered after the filing. In addition Sterling will continue to comply with all environmental and regulatory requirements. The Company remains committed to the safety of our employees and the communities in which we operate.

As the Company’s international operations have been excluded from the filing, there should be no impact whatsoever on their ability to continue to meet the needs of their customers and employees as well as their financial obligations to their suppliers, vendors and creditors.

This process will only strengthen the Company’s leadership position in the petrochemical, pulp-bleaching and water-treatment industries.