SPARTECH CORP. ANNOUNCES CONVERSION OF BONDS TO EQUITY

ST. LOUIS Spartech Corp. has announced the conversion of $10 million of debentures (bonds) into equity.

"This conversion is just part of the company's previously announced $30 million debt-to-equity restructuring," said Bradley B. Buechler.

Spartech, which operates three divisions, manufactures a wide range of products for the plastics industry, including rigid plastic sheets, specialty plastic alloys and compounds and extruded-blown polyethylene film.

The firm includes two facilities at Cape Girardeau Atlas-Alchem Plastics, One Atlas Drive, and Resin Exchange, Nash Road Industrial Park.

Holders of $10 million of the company's 9 percent convertible subordinated debentures have converted the bonds into common stock, which is being held by an escrow agent. The bond holders received 320 shares of common stock for each $1,000 bond converted.

"This is the first step in our restructuring," said Buechler. "The debentures and common stock were closed in escrow awaiting completion of the total transaction."

Buechler added that an additional $20.2 million of subordinated debt will also be converted into equity.

"As we near completion of the entire restructuring our operating results remain strong and continue to exceed our original projections," said Buechler.

Debenture holders who did not convert have received their semi-annual interest payment.

"Total restructuring is expected to be completed by mid-May," said David B. Mueller, the company's vice president of finance and chief financial officer. "When completed, it will significantly strengthen our financial condition as well as reduce our annual interest expense by $3 million."