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FORSTMANN & COMPANY TO OFFER COMMON SHARES TO PUBLIC

 FORSTMANN & COMPANY TO OFFER COMMON SHARES TO PUBLIC
 NEW YORK, Dec. 9 /PRNewswire/ -- Forstmann & Company, Inc. announced


today that it has filed with the Securities and Exchange Commission a registration statement relating to an initial public offering of 3,100,000 shares of its common stock. Forstmann & Co. is a leading designer, manufacturer and marketer of fashionable, high quality fabrics for brand-name womenswear, menswear and outerwear, as well as interior textiles and specialty fabrics.
 In addition, the company announced that it will promptly begin an offer to exchange cash and unregistered shares of its common stock for up to $50 million aggregate face amount of its senior subordinated notes.
 "Over the past 18 months, a new customer-driven business strategy, implemented by the senior management team installed in 1990, has resulted in substantially improved market position and profitability," said Christopher L. Schaller, president, chief executive and chief operating officer. "As a result, Forstmann is now selling its fabrics to more than 50 new customers and has achieved an increase in operating income of 55 percent before a non-cash writeoff of certain assets, from $9.5 million in 1990 to $14.7 million in 1991. Significantly, this increase has occurred during a period of generally weak apparel sales.
 "The common stock offering and the exchange offer are designed to improve Forstmann's financial and operating flexibility and reduce future interest and related debt amortization expense," continued Schaller.
 In addition to the initial public offering and the exchange offer, Forstmann has also received a commitment letter from its Agent Bank to enter into and syndicate a new credit facility which offers the company a lower interest rate, lower fees and a two year extension of the agreement until November 1994.
 The Common Stock Offering:
 Of the 3,100,000 shares of Forstmann common stock proposed to be issued in the public offering, 2,480,000 shares will be offered in the U.S., and the remaining 620,000 shares will be offered in a concurrent international offering. Up to an additional 465,000 primary shares may be offered by the company solely to cover underwriters' over-allotments.
 Net proceeds from the common stock offering, estimated to be approximately $33.6 million, will be used primarily to pay the cash portion of the consideration in the company's exchange offer.
 Application has been made to approve the inclusion of the shares offered to the public for quotation of the NASDAQ National Market System under the symbol "FSTM."
 Kidder, Peabody & Co. Incorporated and Prudential Securities Incorporated are co-managing underwriters in the domestic offering. Kidder, Peabody International Limited and Prudential-Bache Securities (U.K.) Inc. are co-managing underwriters in the international offering.
 Exchange Offer:
 Forstmann will offer to exchange cash and unregistered shares of its common stock for up to $50 million face amount of its 14-3/4 percent senior subordinated notes and split coupon redeemable amended senior subordinated notes, each due April 15, 1999.
 Pursuant to the exchange offer, which is being commenced later today, holders of senior subordinated notes who are "qualified institutional buyers" and "accredited investors" and whose securities are surrendered and accepted for exchange pursuant to the exchange offer will receive for each $1000 face amount of their senior subordinated notes:
 -- $580 in cash,
 -- a number of unregistered shares of common stock equal to the result obtained by dividing $420 by the initial public offering price per share (but in no event more than 35 shares), together with
 -- cash in an amount equal to the accrued interest up to (but not including) the date on which the exchange offer is consummated.
 At the close of business on Dec. 4, 1991, there was issued and outstanding $102,872,050 aggregate face amount of senior subordinated notes. There is no minimum condition for the exchange offer, but Forstmann has received the commitment of Odyssey Partners, L.P., the principal shareholder of Forstmann, to deliver $46,219,500 aggregate face amount of the senior subordinated notes owned by Odyssey to the company for exchange.
 Pursuant to the terms of the exchange offer, if more than $50 million aggregate face amount of senior subordinated notes are validly surrendered for exchange and not withdrawn, Forstmann will accept up to $50 million aggregate face amount of the senior subordinated notes on a pro rata basis in proportion to the face amount of Senior Subordinated Notes surrendered by each holder. The exchange offer, the proration period and withdrawal rights will expire at midnight, New York time, on Jan. 7, 1992, unless extended. The offer is conditioned upon, among other things, the successful consummation by the company of its initial public offering.
 The dealer manager for the exchange offer is Kidder, Peabody & Co. Incorporated.
 Consent Solicitation:
 Forstmann also announced that it will solicit consents from holders of record of its senior subordinated notes on Dec. 4, 1991 to waive certain provisions in the Indenture in order to permit the company to consummate a merger of a corporation formed for the purpose of the merger with and into Forstmann. The primary purpose of the merger is to effect a proportionate share reduction of its existing common equity which will provide the company with the appropriate capital structure for the public offering.
 In order to effect the waiver, the company is seeking consents from holders of at least $28,326,276 aggregate face amount of senior subordinated notes in addition to those committed for exchange by Odyssey Partners.
 The consent solicitation will expire at 5:00 p.m., New York City time on Dec. 23, 1991, unless extended.
 The solicitation agent for the consent solicitation is Kidder, Peabody & Co. Incorporated.
 A registration statement relating to the offering has been filed with the Securities and Exchange Commission on Dec. 9, 1991 but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities 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.
 -0- 12/9/91
 /CONTACT: Dawn Dover or Roanne Kulakoff of Kekst and Company, 212-593-2655, for Forstmann & Company/
 (FSTM) CO: Forstmann & Company Inc. ST: New York IN: SU: OFR


TS -- NY041 -- 0556 12/09/91 12:41 EST
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Publication:PR Newswire
Date:Dec 9, 1991
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