AgriBioTech Inc. today announced that ABT and its operating subsidiaries intend to file this week voluntary petitions with the U.S. Bankruptcy Court for the District of Nevada in Las Vegas to reorganize under Chapter 11 of the U.S. Bankruptcy Code in order to implement an operational restructuring and financial reorganization. 

ABT intends to operate in the normal course of business during the restructuring. 

To ensure that ABT has the short-term working capital necessary to operate its business, ABT is
negotiating for debtor-in-possession ("DIP'') financing from its current lending group, led by Bank
of America N.A. This DIP financing should include additional funds. 

Promptly after the filing, ABT will request the Court's permission to access the DIP financing to fund normal business operations and other cash needs during the bankruptcy proceeding. The company intends to pay employee salary, wages and benefits throughout the reorganization process. 

The company said that its efforts over the past several months to obtain a new financing package
from GE Capital were unsuccessful. 

"AgriBioTech has faced many challenges in the last few years,'' said Chairman and Chief Executive Officer Richard Budd. "An oversupply of seed with a downturn in industry pricing, difficulties inherent in integrating the operations, culture and accounting systems of 34 companies into single operational units, delays in bringing seed to market, reduced revenues, higher-than-expected expenses and slow cash collections from a weak agricultural economy have led to significant losses and a lack of current liquidity. 

"However, we believe that the benefits afforded by Chapter 11 will allow us to successfully
restructure our operations and devise a plan to pay our creditors.'' 

Budd continued, "Most importantly, we believe Chapter 11 aids our ability to continue to serve our customers and pay our employees, and vendors while we reorganize.'' 

The book value of ABT's assets (excluding intangibles such as goodwill) of Dec. 31, 1999,
exceeded liabilities. AgriBioTech is a vertically integrated, full-service seed company specializing in the forage and turfgrass sector, complete with research and development of proprietary seed
varieties, seed processing plants, and a national and international distribution and sales network. 

Company news release
N2422