Denali news & news releases                                                                                      

  Contacts:

R. Kevin Andrews
Chief Financial Officer
713-627-0933

Ken Dennard / kdennard@easterly.com
Lisa Elliot / lisae@easterly.com

Easterly Investor Relations
713-529-6600

	FOR IMMEDIATE RELEASE 00-10
	DENALI ANNOUNCES REVISIONS TO PROPOSED INVESTMENT IN COMPANY BY WILLIAM BLAIR MEZZANINE CAPITAL PARTNERS AND 30-DAY FORBEARANCE BY LENDERS JULY 12, 2000 ­ HOUSTON, TEXAS ­ Denali Incorporated (NASDAQ:DNLI) today announced that it has entered into a revised letter of intent with William Blair Mezzanine Capital Partners relating to an investment by Blair in the Company. Under the new proposal, Blair will invest a total of $23 million in the Company, made up of $18 million of subordinated debt with detachable warrants to purchase up to 2,550,000 shares of Company common stock at $2.26 per share, and $5 million of preferred stock with detachable warrants to purchase up to 1,330,645 shares of Company common stock at $2.26 per share. The Company is currently negotiating definitive documentation for this investment with Blair. The transaction will be subject to satisfactory due diligence completion by Blair and stockholder approval. The Company will prepare and distribute proxy materials to reflect the proposed investment as soon as possible. The stockholder meeting that was scheduled for July 25, 2000, will be rescheduled. The Company expects to hold a special stockholders meeting in mid-September to approve the proposed investment. The Company will announce the record date and meeting date as soon as these dates are determined. Denali also announced that it has obtained the agreement of its U.S. bank facility lenders not to enforce their remedies against the Company until July 31, 2000 for the Company¹s ongoing financial covenant defaults and for the Company¹s failure to make required principal payments due under the facility on June 30, 2000. Similarly, the Company has obtained the agreement of its subordinated debt lenders not to enforce their remedies against the Company until July 31, 2000 for the Company¹s ongoing financial covenant defaults and the Company¹s failure to make required interest payments due under the subordinated debt on June 30, 2000. Denali Incorporated, with pro forma trailing twelve month revenues of over $200 million, is a global provider of fluid handling products specializing in corrosion-resistant applications in process industries such as: chemical, power, pulp and paper, petroleum equipment and water/wastewater. The Company manufactures engineered fiberglass-composite tanks, vessels and piping systems, as well as steel, aboveground storage tanks. The Company also distributes a wide range of engineered products and systems. Headquartered in Houston, Texas, Denali Incorporated has over 20 manufacturing facilities in the United States, the Netherlands, Germany, the United Kingdom, Poland, France and Chile and joint ventures in Venezuela and Thailand. For more information on the Company, please visit its Web site at www.denaliincorporated.com. This press release does not constitute an offer of any securities for sale. The Company will not offer or sell any such securities in the United States absent registration or an applicable exemption from registration under applicable securities laws. This news release contains certain forward-looking statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the company and its subsidiaries that are based on the beliefs of the company's management as well as assumptions made by and information currently available to the company management. When used in this report, the words, "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the company or its subsidiaries or company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. ###

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