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TELEPHONE AND DATA SYSTEMS, UNITED STATES CELLULAR PLAN EQUITY FOR DEBT SWAP AS PART OF USM RIGHTS OFFERING

 CHICAGO, Sept. 22 /PRNewswire/ -- Telephone and Data Systems, Inc. (TDS) (AMEX: TDS) and United States Cellular Corp., TDS's 83.5 pecent- owned subsidiary (AMEX: USM), announced plans to reduce by approximately $345 million USM's debt due to TDS under a revolving credit agreement as part of a proposed rights offering to all USM stockholders. USM said it plans the rights offering to enable all of its stockholders to participate in a transaction that would greatly de-leverage its balance sheet and thereby better position the company to continue its expansion and development activities. TDS's objective is to position each of its business units to pursue new technologies and market opportunities, including new frequency allocations.
 USM intends to file in the near future a registration statement with the Securities and Exchange Commission (SEC) relating to the proposed transaction. Holders of record on or about the effective date of the registration statement would receive one right for each five shares of common stock held on the record date. At June 30, 1993, USM had outstanding a total of approximately 56.1 million common and series A common shares. USM intends to use all of the proceeds from the transaction to reduce its indebtedness to TDS, which was incurred in connection with the acquisition and development of USM's cellular business.
 All holders of common shares would receive rights to acquire common shares in proportion to the number of common shares held on the record date and TDS, as the sole holder of series A common shares, would receive rights on the same basis to acquire series A common shares. Each right would entitle the holder to acquire one share of common stock at a price which is expected to be about 10 percent below the per share market price of the common shares on or about the effective date of the registration statement. The rights for common shares would be transferable and are expected to be traded on the American Stock Exchange. The rights would expire about 30 days after issuance. Holders would also be able to subscribe for additional shares, subject to proration, should the rights offering be initially not fully subscribed.
 TDS, which owns 100 percent of the series A common shares and over 67 percent of the common shares of USM, announced its intention to exercise all of its rights and to acquire all shares not subscribed for by other stockholders.
 The rights offering will be made only by means of a prospectus once the registration statement becomes effective pursuant to the Securities Act of 1933, as amended. 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 such shares of common stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
 TDS is a Chicago-based telecommunications company with established local telephone, cellular telephone and radio-paging operations. TDS strives to build value for its shareholders by providing excellent communications services in attractive, closely related segments of the telecommunications industry.
 Headquartered in Chicago, USM manages and invests in cellular systems throughout the United States. As of June 30, 1993, USM owned or had rights to acquire interests representing 22.3 million population equivalents in 200 markets. At that date, USM managed operational systems serving 128 markets.
 On Thursday, Sept. 23, at 9 a.m. Central Daylight Time, TDS and USM will hold a joint news conference by phone to discuss the proposed transaction. The news conference is available by calling 800-837-1012.
 /CONTACT: Murray L. Swanson, TDS executive vice president-finance, 312-630-1900, or Kenneth R. Meyers, USM vice president-finance, 312-399-8900. Out-of-town media, please call collect./
 (TDS USM)


CO: Telephone and Data Systems, Inc.; United States Cellular Corp. ST: Illinois IN: TLS SU: OFR

LG -- NY033 -- 4638 09/22/93 11:09 EDT
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Publication:PR Newswire
Date:Sep 22, 1993
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