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Aviation Sales Company Announces Commencement of Rights Offering and Note Exchange Offer and Consent Solicitation.

Business Editors

GREENSBORO, N.C.--(BUSINESS WIRE)--Jan. 15, 2002

Sets Meeting Date for Special Stockholders' Meeting

to Consider Restructuring

Aviation Sales Company (OTCBB:AVIO) today announced that it has commenced its previously announced rights offering and note exchange offer and consent solicitation.

In addition, the Company announced that its special stockholders meeting to consider and vote upon the proposed restructuring will be held on February 19, 2002.

The Rights Offering

Holders of the Company's common stock at the close of business on Friday, December 28, 2001 have been issued non-transferable rights to purchase up to 24,024,507 post-reverse split shares of the Company's common stock in the rights offering. Each right allows the holder thereof to purchase one share of the Company's post-reverse split common stock at a purchase price of $.8325 per share (or the equivalent of $.0833 per pre-reverse split share). The rights offering will expire on February 20, 2002, unless it is extended. The rights offering is subject to a number of conditions, including the completion of the note exchange offer and consent solicitation and the receipt of stockholder approval of the restructuring, including approval of the rights offering, the note exchange, a proposed reverse split of the Company's currently outstanding common stock on a one-share-for-ten-shares basis and a proposed increase in the Company's authorized common stock from 30 million shares to 500 million shares.

The complete terms of the rights offering are contained in the Company's prospectus dated January 9, 2002. Copies of the prospectus and rights offering documents can be obtained from Continental Stock Transfer & Trust Company, which is the subscription agent for the rights offering, or from Morrow & Co., Inc., which is the information agent for the rights offering. Morrow & Co.'s telephone number is (800) 607-0088. Continental's telephone number is (212) 509-4000 (Ext. 535).

The Note Exchange Offer and Consent Solicitation

The Company is offering to exchange all of its currently outstanding $165 million of 8 1/8% senior subordinated notes due 2008 for $10 million in cash, $100 million of the Company's new 8% senior subordinated convertible PIK notes due 2006, shares of the Company's post-reverse split common stock and warrants to purchase additional shares of the Company's post-reverse split common stock.

The note exchange offer and consent solicitation will expire on February 20, 2002, unless it is extended. Holders must tender their old notes prior to the expiration date in order to receive the exchange offer consideration. The note exchange offer and consent solicitation is conditioned on a number of conditions, including receipt of tenders from holders of at least $132 million in aggregate principal amount of the old notes (80% of the outstanding old notes), completion of the rights offering and the receipt of stockholder approval of each of the parts of the restructuring. The holders of 73.02% of the outstanding old notes have previously agreed to exchange their old notes in the exchange offer.

The complete terms of the exchange offer and consent solicitation are contained in the Company's prospectus dated January 9, 2002. Houlihan Lokey Howard & Zukin Capital is the exclusive dealer manager for the note exchange offer and consent solicitation and HSBC Bank USA is the exchange agent for the note exchange offer and consent solicitation. Copies of the prospectus and consent solicitation and exchange offer documents can be obtained by calling HSBC Bank USA at (800) 662-9844. Additional information concerning the terms and conditions of the note exchange offer and consent solicitation may be obtained by contacting Houlihan Lokey Howard & Zukin Capital at (212) 497-4100.

General

The Company's registration statements relating to the rights offering and the note exchange offer and consent solicitation have recently become effective under the Securities Act of 1933. The Company has also mailed a definitive proxy statement to its stockholders relating to the February 19, 2002 meeting of its stockholders, which meeting has been called to consider and vote upon the terms of the restructuring. These documents contain important information about the Company, the rights offering, the note exchange offer and consent solicitation and related matters. Noteholders, stockholders and other interested parties are urged to carefully read these documents for information regarding these matters. The prospectus and consent solicitation, the related letter of transmittal and certain other documents related to the note exchange offer and consent solicitation and the prospectus and other documents related to the rights offering will be made available to all stockholders and noteholders as of the record date, at no expense to them. These documents are also available at no charge at the SEC's website at www.sec.gov. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the new notes or the shares of common stock to be offered in the rights offering in any state where such offer, solicitation or sale would be unlawful.

Aviation Sales Company is a leading independent provider of fully integrated aviation maintenance, repair and overhaul (MR&O) services for major commercial airlines and maintenance and repair facilities. The Company currently operates four MR&O businesses: TIMCO, which, with its three locations, is one of the largest independent providers of heavy aircraft maintenance services in North America; Aerocell Structures, which specializes in the MR&O of airframe components, including flight surfaces; Aircraft Interior Design, which specializes in the refurbishment of aircraft interior components; and TIMCO Engine Center, which refurbishes JT8D engines. The Company also operates TIMCO Engineered Systems, which provides engineering services to our MR&O operations and our customers.

This press release contains certain forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. A number of factors, including those identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 and those identified below, could adversely affect the Company's ability to obtain these results: the Company's ability to satisfy the conditions to its note exchange offer and consent solicitation and rights offering, the Company's ability to continue to generate sufficient working capital to meet its operating requirements and service its indebtedness, the Company maintaining good working relationships with its vendors and customers, the Company's ability to achieve gross margins at which it can be profitable, including margins on services the Company performs on a fixed price basis, competition in the aircraft maintenance, repair and overhaul market and the impact on that market and the Company of the terrorist attacks on September 11, 2001, the Company's ability to attract and retain qualified personnel in its business, utilization rates for its MR&O facilities, the Company's ability to effectively manage its business, competitive pricing for the Company's products and services, economic factors which affect the airline industry, and changes in government regulations. Certain of these risks are described in the Company's filings with the Securities and Exchange Commission (SEC). Copies of the Company's SEC filings are available from the SEC or may be obtained upon request from the Company. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.
COPYRIGHT 2002 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Jan 15, 2002
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