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AGREEMENT TO EXCHANGE BROOKE GROUP STAKE IN NEW VALLEY WITH DEBT HOLDERS FULLY SUBSCRIBED; BROOKE GROUP COMPLETES POSTPONED INTEREST PAYMENTS

 NEW YORK, Oct. 29 /PRNewswire/ -- Brooke Group Ltd. (NYSE: BGL) announced today that it and its wholly owned subsidiary BGLS have completed the first phase of their offer announced on Oct. 5, 1993, to exchange with eligible debt holders Brooke Group's common and preferred shares in New Valley Corp. for a package comprised of cash and BGLS debt securities.
 Under today's exchange agreement, the exchanging debt holders will exchange $49.9 million of BGLS's 16-1/8 percent Senior Subordinated Notes, $39 million of BGLS's 14-1/2 percent Subordinated Notes, and $21.9 million in cash, for Brooke Group's stake in New Valley. Completion of the exchange is subject to a number of conditions, including consummation of a satisfactory plan of reorganization of New Valley.
 In connection with today's announcement, Brooke has paid the full interest payment of BGLS Senior Subordinated Notes and Subordinated Notes which had been due Oct. 1, 1993. This payment had been postponed pending completion of negotiations of the terms of the exchange offer.
 It is currently anticipated that a reorganized New Valley will be able to emerge from Chapter 11 by the end of the first quarter of 1994, at which time, subject to certain conditions, the exchange will be completed. Upon completion, Brooke will register a $111 million gain, since its investment in New Valley has been written down to zero.
 Brooke currently owns 42 percent of the common stock of New Valley and 43 percent of the Class A preferred. New Valley is the former Western Union Corporation.
 Bennett LeBow, chairman of Brooke Group, said, "This agreement is an important step in the restructuring of Brooke Group, and the exchange will dramatically bring down our debt level."
 Brooke Group Ltd. is a holding company whose holdings include its Liggett Group Inc. subsidiary, a tobacco products company; its Liggett- Ducat subsidiary, a tobacco and real estate venture in Russia; its MAI Systems Corporation subsidiary; and investments in various other enterprises.
 -0- 10/29/93
 /CONTACT: Robert Siegfried or David Kronfeld of Kekst and Company, 212-593-2655/
 (BGL)


CO: Brooke Group Ltd.; BGLS; New Valley Corp. ST: New York IN: TOB SU:

TW -- NY081 -- 8657 10/29/93 15:58 EDT
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Publication:PR Newswire
Date:Oct 29, 1993
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