Printer Friendly

E-II REORGANIZATION PLAN CONFIRMED

 NEW YORK, May 25 /PRNewswire/ -- E-II Holdings Inc. announced today that the United States Bankruptcy Court for the Southern District of New York has confirmed the Company's Plan of Reorganization. Steven J. Green, Chairman, President and Chief Executive Officer of E-II, made the announcement, stating that "This is a great day for E-II Holdings, its employees and customers throughout the world."
 In confirming the Plan, the Court overruled all of Carl Icahn's objections to the Plan, holding that the Company had met its burden of proof for confirming the Plan by clear and convincing evidence.
 As confirmed, the Plan includes modifications which: (i) increase the amount of cash payable to the holders of E-II's Senior Notes from an aggregate of $331 million to $342.23 million; and (ii) remove restrictions on the transferability of shares of new common stock acquired by holders of Senior Notes through Stock Elections (other than applicable securities laws restrictions).
 The amount of cash payable to Senior Noteholders would be increased to $358.65 million if the Court determines the Senior Noteholders are entitled to compounded interest as of the date E-II filed its Chapter 11 petition. Through these modifications, and based on an increase in the estimated reorganization equity value of Reorganized E-II, the Plan provides a recovery to Senior Noteholders of 100 percent of the allowed amount of their claims.
 As a result of the estimated increase in the reorganization equity value of the Company, the Company stated that it would be giving beneficial holders of Senior Notes an opportunity to exercise a new Stock Election. The Company will be submitting an order to the Court to establish the new Stock Election Procedures.
 Increased Reorganization Values
 During the hearing to consider confirmation of the Plan held on May 24, 1993, the Company's financial advisor, Bear, Stearns & Co., Inc., reported that, based on the Debtor's actual operating results for the fiscal year ended January 31, 1993 and preliminary results for the first fiscal quarter ended April 30, 1993, changes in market conditions, the settlement of certain claims in the Debtor's case, and certain other factors, including the accumulation of additional cash, the estimated midpoint of the reference range of the reorganization enterprise values of the component operating businesses and other assets and liabilities of Reorganized E-II has increased from $862 million to $919 million.
 Based on estimated indebtedness of $624 million (net of approximately $25 million of working capital reserves), the reference range of the reorganization equity values of Reorganized E-II is now approximately $255 million to $332 million, or approximately $16.50 to $21.50 per share of New Common Stock. Bear Stearns also reported that based on changes in market conditions and improvement in the Company's recent financial results, the estimated reference range of the fair market value of the new senior secured notes to be issued under the Plan is approximately 101 percent to 102 percent of par value.
 Select Summary Financial Information
 The following chart summarizes certain unaudited financial information concerning the Debtor for the fiscal year ended January 31, 1993:
 E-II HOLDINGS INC.
 (Unaudited, Dollars in Millions)
 Fiscal Year Ended January 31, 1993
 Revenues $957.5
 Gross Margin 359.5
 Operating Income 99.4
 Interest Expense 106.7
 Net Income from Continuing
 Operations (26.7)
 Earnings Before Interest,
 Taxes, Depreciation and
 Amortization (1) 124.7
 Capital Expenditures 33.1
 Cash and Short-Term Investments 296.9
 (1) Operating income plus depreciation of fixed assets, amortization of capital leases and amortization of goodwill.
 Recoveries To Securityholders
 The Plan, as modified, provides a recovery to holders of Senior Notes equal to 100 percent of the amount of their allowed claims through the distribution of cash, new senior secured notes (valued in excess of par), and an opportunity to elect to receive new common stock. Based on the revised estimates of the reorganization enterprise value of the Company, the Statutory Committee of Unsecured Creditors of the Company reported at the confirmation hearing that it had determined to employ an estimated reorganization equity value for Reorganized E-II equal to $20.25 per share of new common stock and a value of the new senior secured notes equal to 101.5 percent of par for purposes of calculating recoveries to holders of Senior Notes and old Junior Debentures.
 As previously reported, each holder of Senior Notes has the right to exercise a stock election and receive shares of new common stock in lieu of some or all of the new senior secured notes such holder would be entitled to under the Plan, subject to the maximum of 5 million shares of new common stock in the aggregate. The principal amount of new senior secured notes allocated to such holder will be reduced on a dollar-for-dollar basis at the rate of $14.55 for each share of new common stock subscribed for, and such amount of new senior secured notes will be reallocated to the holders of Junior Debentures.
 Based on these estimates of the values of the new common stock and the new senior secured notes, and the payment of additional cash under the modifications to the Plan, the recoveries to Senior Noteholders and Junior Debentureholders are as follows:
 E-II HOLDINGS INC.
 Recoveries Assuming A Total Senior Note
 Claim Of $650.2 Million
 (dollars in millions)
 Distribution Assuming
 No Stock Election Full Stock Election (2)
 Distribution To Holders
 of Senior Notes:
 Cash $342.23(a) $342.23(a)
 New Senior Secured Notes 284.20(b) 210.36(b)
 New Common Stock 0.00 97.62(c)
 Total Recovery $626.43 $650.21
 Claim 620.61 650.21
 Face 527.00 527.00
 Percent Recovery on Claim 96.3 pct. 100.0 pct.
 Percent Recovery on Face 118.9 pct. 123.4 pct.
 Distribution To Holders of
 Junior Debentures:
 New Senior Secured Notes $223.30 $297.14
 New Common Stock 292.85(c) 195.24(c)
 Beneficial Interests In E-II 30.45(d) 30.45(d)
 Settlement Trust
 Total Recovery $546.60 $522.83
 Claim 864.25 864.25(e)
 Face 698.42 698.42
 Percent Recovery on Claim 63.2 pct. 60.5 pct.
 Percent Recovery on Face 78.3 pct. 74.9 pct.
 NOTES:
 (2) In a Stock Election, the principal amount of New Senior Secured Notes will be reduced on a dollar-for-dollar basis at the rate of $14.55 for each share of New Common Stock subscribed for. The equity value attributed to the New Common Stock by the Statutory Committee of Unsecured Creditors of the Company is $20.25.
 (a) Would be increased to $358.65 million if the Court determines Senior Noteholders are entitled to compounded interest as of the commencement of the Company's Chapter 11 case, increasing total recovery to Senior Noteholders to $661.3 million (after accounting for effect of additional cash payment on equity values).
 (b) Calculations assume New Senior Secured Notes are valued at 101.5 percent of par.
 (c) Equity values would be reduced by payment of additional cash to Senior Noteholders on account of compounded interest prior to chapter 11 filing.
 (d) Assuming E-II Settlement Trust net assets of $40.6 million and the portion (75 percent) of the Beneficial Interests in the E-II Settlement Trust to which the holders of Old Debentures are entitled.
 (e) Does not include compounded interest prior to chapter 11 filing.
 E-II Holdings Inc. is a holding company with subsidiaries engaged in the manufacture and sale of a variety of consumer products throughout the world. E-II's core businesses are: Samsonite luggage; Culligan water treatment equipment; McGregor, including The 500 Fashion Group, men's tailored clothing; Anvil, T-Shirts; Global licensing, licensing trademarks; and Pet specialties, pet food.
 -0- 5/25/93
 /CONTACT: Michael W. Kempner or Michael Levine, public relations of MWW/Strategic Communications, Inc., 201-342-9500, for E-II Holdings Inc./


CO: E-II Holdings Inc. ST: New York IN: REA SU: RCN

LD -- NY101 -- 2383 05/25/93 20:50 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 25, 1993
Words:1317
Previous Article:MEGAFOODS STORES INC. ANNOUNCES CHIEF FINANCIAL OFFICER
Next Article:187 NEW MANUFACTURERS CALL MARYLAND HOME; MANUFACTURING JOBS WON AND LOST VARY WIDELY FOR INDUSTRIES IN STATE
Topics:


Related Articles
INTERCO FILES AMENDED CHAPTER 11 PLAN OF REORGANIZATION
NEW VALLEY CORPORATION REACHES AGREEMENT WITH PBGC AND REGISTERS PREPACKAGED CHAPTER 11 REORGANIZATION PLAN
E-II HOLDINGS: INVOLUNTARY FILING HAS NO IMPACT ON REORGANIZATION PLAN AND OPERATIONS OF ITS SUBSIDIARIES
E-II HOLDINGS ANNOUNCES POSITIVE DEVELOPMENTS VOTING TRUST AGREEMENT HAS BEEN EXTENDED
ICAHN CONFIRMS BID FOR OPERATING ASSETS OF E-II HOLDINGS
COURT PAPERS DESCRIBE MODIFICATIONS TO E-II PLAN OF REORGANIZATION
THE NETPLEX GROUP, INC. AND AMERICA'S WORK EXCHANGE, INC. WAIVE NASDAQ LISTING REQUIREMENT
Salant Corporation Emerges From Bankruptcy.
Emergency Steel Loan Guarantee Board Approves Guarantee Application for Geneva Steel's $110 Million Term Loan.
ZELTIA'S FOUR MOST DEVELOPED PRODUCTS RECEIVE INTERNATIONAL RECOGNITION AT THE AMSTERDAM ONCOLOGY SYMPOSIUM.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters