Continental Health Affiliates announces exchange offer.ENGLEWOOD CLIFFS, N.J.--(BUSINESS WIRE)--Aug. 27, 1996-- Continental Health Affiliates Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). , Bulletin Board: CTHL), announced today that it has made an exchange offer to the holders of its 14-1/8 percent subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due Sept. 1, 1996. Continental Health is offering for each $1,000 principal amount of subordinated debentures a share of a new 11 percent convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". with a liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy preference of $1,000. Although the subordinated debentures mature on Sept. 1, 1996, the exchange offer will remain open until Sept. 20, 1996, unless extended. There currently is a total of $1.2 million subordinated debentures outstanding. The exchange offer is conditional on at least $600,000 principal amount being exchanged. However, Continental Health can waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such this condition. The new 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. will be convertible for three years into Continental Health common stock which, at the time of conversion, has a market value (based on the most recent 20 days' trading) totaling 110 percent of the liquidation preference of the preferred stock. After the three years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time preferred stock will be convertible into common stock which has a market value totaling 100 percent of the liquidation preference of the preferred stock. Holders of the preferred stock will be entitled to dividends totaling $110 per share per year, equal to 11 percent of the liquidation preference of the preferred stock. After three years, Continental Health will have the right either to (1) redeem the preferred stock for $1,000 per share or (2) convert the outstanding preferred stock into Continental Health common stock which has a market value at the time of the conversion equal to 100 percent of the liquidation preference of the preferred stock. Because of the conversion terms of the preferred stock, a holder who exchanges subordinated debentures for preferred stock will have the right, during the first three years after the exchange takes place, to convert the preferred stock into common stock with a market price equal to $1,100 for each $1,000 of subordinated debentures which was exchanged. During the period prior to conversion, the exchanging holder of subordinated debentures will be entitled to dividends equal to 11 percent of the principal amount of the subordinated debentures which are exchanged. Because the exchange offer extends beyond the Sept. 1 maturity date of the subordinated debentures, a holder who wishes to be able to tender subordinated debentures for exchange will not be able to tender them for payment as soon as they become due. However, if a holder retains subordinated debentures until the exchange offer expires, and then submits them for payment, the holder will receive interest at 14-1/8 percent per annum Per annum Yearly. for the period from Sept. 1, 1996 until the day the exchange offer expires. Jack Rosen, Continental Health's chairman, said, "The Exchange Offer is a response to the fact that several holders of subordinated debentures had expressed interest in continuing to hold a fixed income security of Continental Health Affiliates. We believe the Exchange Offer provides a holder of Subordinated Debentures a way either to (1) continue to hold a fixed income security of Continental Health or (2) have an investment in Continental Health which, for at least three years, the holder should be able to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the into the market at a significant premium above the principal amount of the Subordinated Debentures." CONTACT: Continental Health Affiliates Inc. S. Colin Neill, 201/567-4600 or Porter, LeVay & Rose Inc., New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Michael J. Porter, 212/564-4700 |
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