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THOUSAND TRAILS DEBT EXCHANGE PROPOSAL ANNOUNCED; USTRAILS BEGINS TENDER OFFER FOR 11 PERCENT OF THOUSAND TRAILS SHARES

THOUSAND TRAILS DEBT EXCHANGE PROPOSAL ANNOUNCED; USTRAILS BEGINS TENDER
 OFFER FOR 11 PERCENT OF THOUSAND TRAILS SHARES
 DALLAS, April 24 /PRNewswire/ -- USTrails, Inc. (OTC), and Thousand Trails, Inc. (NASDAQ: TRLS), today jointly announced that USTrails has reached an agreement in principle with a group of noteholders on the terms of an exchange of certain of the $12.5 million of Thousand Trails subordinated notes which matured on March 16, 1992, and have not been paid. Concurrently, USTrails today commenced a tender offer to purchase 2,800,000 shares (11 percent) of the outstanding common stock of Thousand Trails for $1.10 per share net. The exchange and tender offer transactions, if successful, are intended to avoid a filing by Thousand Trails under Chapter 11 of the Bankruptcy Code.
 The companies stated that holders of $8,617,000 principal amount of Thousand Trails subordinated notes have agreed in principle to exchange their notes for $10,501,000 principal amount of USTrails' new issue of additional Series 12 percent secured notes due 1998 and warrants entitling them to purchase, at a price of $4.24 per share, 284,567 shares of USTrails' common stock, representing approximately 6.8 percent of the fully diluted USTrails' common stock. Immediately prior to the exchange, Thousand Trails has agreed to pay the interest accrued on the exchanged subordinated notes through the date of payment. Moreover, as an additional inducement to the noteholders participating in the exchange, USTrails has agreed to use its best efforts to cause the election of a designee of these noteholders to the board of directors of USTrails. At the same time, Thousand Trails would pay the noteholders who do not participate in the exchange the principal and accrued interest through the date of payment on their subordinated notes.
 The companies also stated that USTrails and Thousand Trails have reached an agreement in principle which provides for USTrails to lend Thousand Trails the funds necessary to make the payments on the subordinated notes in connection with the contemplated exchange. This agreement in principle also provides for a related restructuring of all of Thousand Trails' outstanding indebtedness to USTrails. The restructuring of the intercompany debt is conditioned upon the successful out-of-court exchange of Thousand Trails subordinated notes.
 The contemplated exchange of Thousand Trails subordinated notes is subject to a number of conditions, including the execution and delivery of definitive documentation and, unless holders of $10 million of Thousand Trails subordinated notes participate in the exchange, the successful completion of the USTrails tender offer.
 If successful, USTrails' tender offer would increase USTrails' interest in Thousand Trails from 69 percent to 80 percent. The primary purpose of the tender offer is to reduce Thousand Trails' income tax liabilities in fiscal 1992 and subsequent years through a tax election which requires that USTrails have acquired 80 percent of Thousand Trails by June 29, 1992. The tender offer is subject to several conditions, including the tender of at least 2,700,000 shares of Thousand Trails common stock and USTrails' ability to make the above-described tax election.
 USTrails stated that it believes selling shareholders will receive a fair price for their shares and that remaining shareholders will benefit from USTrails' efforts to maintain, for the remaining minority shares, registration under the Securities Exchange Act of 1934, which entails ongoing reporting requirements, as well as NASDAQ-NMS trading. USTrails also said that it believes that solving Thousand Trails' current liquidity problems will allow Thousand Trails and its affiliates the opportunity to create new operating and marketing strategies required for the future.
 A special committee of independent directors of Thousand Trails has unanimously determined that the terms of the tender offer are fair to shareholders other than USTrails. The board of directors of Thousand Trails has unanimously approved the tender offer and recommends that shareholders accept the offer and tender their shares.
 The tender offer will expire at 5:00 p.m., New York City time, on May 22, 1992, unless extended. The depositary for the offer is the American Stock Transfer & Trust Company. The information agent for the offer is Allen Nelson & Company. In connection with the tender offer, USTrails and Thousand Trails have made filings with the Securities and Exchange Commission which are available at the offices of the Commission.
 Thousand Trails owns and operates one of the largest membership- based destination campground resort systems in the United States. The company operates a network of 39 campground resorts in 15 states and in British Columbia, Canada.
 In addition to its 69 percent interest in Thousand Trails, USTrails owns National American Corporation (NACO), which owns and operates a network of 30 membership campground resorts and eight full service resorts.
 The foregoing is neither an offer to buy or sell nor the solicitation of an offer to buy or sell securities.
 -0- 4/24/92
 /CONTACT: Susan A. Seiter of Susan Seiter Associates, 817-488-3142, for USTrails; or Walter B. Jaccard of Thousand Trails, 206-455-3155/
 (TRLS) CO: Thousand Trails, Inc.; USTrails, Inc. ST: Texas IN: LEI SU: RCN


GK -- NY022 -- 2350 04/24/92 10:22 EDT
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Publication:PR Newswire
Date:Apr 24, 1992
Words:845
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