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ENVIRODYNE INDUSTRIES ANNOUNCES AGREEMENT IN PRINCIPLE WITH COMMITTEE OF BONDHOLDERS

 OAK BROOK, Ill., Nov. 19 ~PRNewswire~ -- Envirodyne Industries, Inc. announces that it has agreed in principle with a committee of its bondholders on a plan to restructure the indebtedness due under its 14 percent senior subordinated debentures due 2001 and the 13-1~2 percent subordinated notes due 1996. Under the proposed restructurings, the company will continue to pay all trade and operating expenses within normal trade terms. This agreement in principle supersedes the proposal announced by the company on Jan. 30, 1992.
 Under the new plan, holders of the company's subordinated securities would exchange all their debt and interest claims for $147.5 million principal amount of new 11 percent senior subordinated notes and 19.2 million shares representing approximately 98 percent of Envirodyne's initial common equity. Holders of the $200 million 14 percent senior subordinated debentures would receive $121,162,000 principal amount of the new senior subordinated notes and 15,772,000 shares of common stock. Holders of the $91,350,000 13-1~2 percent subordinated notes would receive $26,338,000 principal amount of the new senior subordinated notes, 3,428,000 shares of common stock and warrants exercisable into 6 million shares of Envirodyne common stock. Emerald Acquisition Corp., Envirodyne's parent corporation, would receive 400,000 shares of common stock and warrants exercisable into 1.2 million shares of common stock. Up to 2.4 million shares of common equity will be reserved for issuance pursuant to management option plans. On a fully diluted basis, assuming exercise of all warrants and managed options, approximate equity ownership would be as follows: holders of subordinated securities 86.3 percent, Emerald Acquisition 5.5 percent and management 8.2 percent.
 The new senior subordinated notes would pay cash interest of 11 percent per annum and mature eight years after consummation of the exchange. Interest on the new senior subordinated notes would begin to accrue on Jan. 1, 1993 and would be payable semiannually in arrears beginning July 1, 1993.
 The warrants issued to the holders of the new senior subordinated notes and Emerald Acquisition would expire 10 years from the date of issuance. Each warrant would be exercisable into one share of common equity at the exercise prices of $4.50 up to Dec. 31, 1993; $6.10 from Jan. 1, 1994 to Dec. 31, 1994; and $6.30 after Jan. 1, 1995.
 The plan is subject to the approval of certain of the company's senior secured lenders. The plan also requires the amendment of certain existing credit agreements with these lenders and of the change of control provisions in the company's $250,000,000 senior discount notes due 1997.
 The committee representing the interests of the subordinated securities includes representatives from Crescent Capital Corporation and Reliance Insurance Corporation as co-chairpersons; IDS Financial Corporation; and Teachers Insurance & Annuity Association. Further details of the plan will be presented this afternoon at a meeting of the holders of the subordinated securities called by the committee.
 The company's cash flows from operations were insufficient to meet the February 1992 cash requirements for debt service. On Jan. 30, 1992, the company announced its intent to renegotiate the subordinated securities and propose a plan to address its future cash flow needs. Consequently, the company suspended all interest payments due on the subordinated securities during 1992.
 The company's senior lenders and equipment lessors have agreed, subject to certain conditions, not to accelerate payment of amounts due them because of the interest payment defaults under the subordinated securities. These Forbearance Agreements remain in effect through Feb. 1, 1993. In addition to the liquidity provided by the suspended interest payments, Envirodyne will, pursuant to the Forbearance Agreements, continue to draw upon existing credit facilities for working capital purposes.
 This announcement does not constitute an offer to sell or buy any security or the solicitation of any consents, which offers and consent solicitations may only be made by means of a proxy statement~prospectus. There can be no assurance that the plan will be approved by the affected parties or implemented.
 -0- 11~19~92
 ~CONTACT: J.S. Corcoran, S.M. Schuster or G.S. Donovan of Envirodyne, 708-575-2400~


CO: Envirodyne Industries, Inc. ST: Illinois IN: SU:

SM -- NY107 -- 3071 11~19~92 16:07 EST
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Publication:PR Newswire
Date:Nov 19, 1992
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