Alliance Imaging announces agreement to repurchase subordinated debentures and preferred stock.ORANGE, Calif.--(BUSINESS WIRE)--Nov. 20, 1996-- At Substantial Discount Alliance Imaging Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SCAN), on Wednesday announced that it has entered into an agreement with the holders of its 7.5 percent Senior Subordinated Debentures due 2005 and its Series A 6 percent Cumulative Preferred Stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. to repurchase those securities by year-end. The securities to be retired, which are carried on the company's balance sheet at an aggregate of $31.6 million, will be repurchased for $16.8 million in cash plus accrued dividends and interest. Substantially all of the funds for the transaction are expected to be provided by the sale of a new issue of Alliance's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , although it is possible that some or all of the funds may be financed with debt. Alliance cautioned that, while it has had preliminary discussions with a proposed financial investor for the new preferred stock issue, there can be no assurance that Alliance and the proposed investor will agree upon terms for the financing. The closing of the repurchase transaction is conditional on Alliance's raising the necessary financing on terms and conditions acceptable to the company and on closing the transaction by Dec. 31, 1996. Richard N. Zehner, chairman and chief executive officer of Alliance, said: "This transaction represents the crucial second step in our efforts to enhance Alliance's flexibility under its present debt covenants. Earlier this month, we retired $5.3 million of principal and amended the terms of our Senior Notes to substantially modify and remove restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. that have hampered our ability to grow by taking advantage of attractive business opportunities. "Upon completion of this transaction as contemplated, we will have eliminated the same restrictions in our Senior Subordinated Debentures. "After completing the proposed transactions and retiring these securities at a substantial discount to book value, in the fourth quarter we will have reduced the company's long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. by over $21.4 million, substantially increased stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. and significantly improved our debt to capitalization ratio. "Following the contemplated transactions, the company will be positioned to move forward aggressively to take advantage of the opportunities that arise in the marketplace," Zehner said. Alliance Imaging plans to immediately apply to NASDAQ for reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. on the National Market System, although there can be no assurance that the company will qualify for listing, especially if debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay is utilized in the transaction. Alliance Imaging Inc. is a leading provider of comprehensive diagnostic imaging and related management services to hospitals and other healthcare providers. Services are provided on either a mobile, shared-user basis or on a full-time single-user basis. The company currently operates its fleet of MRI 1. (application) MRI - Magnetic Resonance Imaging. 2. MRI - Measurement Requirements and Interface. and CT systems nationwide. CONTACT: Alliance Imaging Inc., Orange Terrence M. White, 714/921-5656 www.allianceimaging.com or Allen & Caron Inc Marty Tullio (investors) Owen Daley (media) 714/252-8440 |
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