Collins & Aikman Receives Court Approval for Customer Financing Agreement

Company Obtains $82.5 million in Temporary Price Increases; Commitment for $82.5 million Post-petition Financing

TROY, Mich., July 8 -- Collins & Aikman Corporation announced that the U.S. Bankruptcy Court gave interim approval for the Company to enter into an agreement with certain customers to provide $82.5 million of temporary price increases under existing contracts, an additional $82.5 million of post-petition financing, together with funding of capital requirements (of approximately $140 million). The agreement also provides a commitment not to resource current production or awarded programs, establishes a framework for additional customer price negotiations and sets a timeline for presenting a comprehensive business plan.

Commenting on the agreement, John R. Boken, Chief Restructuring Officer, said "This agreement is the product of constructive negotiations with our lender and customer groups that took place over the last several weeks." Mr. Boken added, "We are extremely pleased to receive the court's approval of this agreement, which will enable Collins & Aikman to continue operating normally as we formulate and implement our business plan. The financing is also a sign of confidence by both our customers and JPMorgan in our ability to address the issues we are currently facing and pursue strategies to maximize the value of Collins & Aikman."

The customer group that has signed the agreement consists of DaimlerChrysler AG, Ford Motor Co., General Motors Corp., Honda Motor Corp., Nissan Motor Co. and Toyota Motor Corp. The customer group represents approximately 85% of the Company's North American revenue.

The financing provided by this customer agreement is supplemental to the court-authorized $150 million interim debtor-in-possession financing provided by JPMorgan and the $30 million post-petition financing previously obtained by the Company from the same customer group. Along with the Company's cash from operations, funds available under the terms of this agreement will be utilized for operating needs.

Additional information regarding the Chapter 11 reorganization is available on the Company's website, http://www.collinsaikman.com/ , or by calling the Company's toll-free Reorganization Information Line at 1-866-795-7641 or for international callers +1 310-432-4170.

Collins & Aikman Corporation, a Fortune 500 company, is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. Headquartered in Troy, Michigan, we have a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. Information about Collins & Aikman is available on the Internet at http://www.collinsaikman.com/ .