Printer Friendly

GAYLORD COMMENCES COMBINATION EXCHANGE OFFER/PREPACKAGED PLAN SOLICITATION /FOLLOWING IS REPEAT OF RELEASE THAT MOVED JULY 24/

            GAYLORD COMMENCES COMBINATION EXCHANGE
             OFFER/PREPACKAGED PLAN SOLICITATION
         /FOLLOWING IS REPEAT OF RELEASE THAT MOVED JULY 24/
    DEERFIELD, Ill., July 24 /PRNewswire/ -- Gaylord Container Corporation (AMEX: GCR) announced today that the Securities and Exchange Commission has declared effective the company's registration statement detailing its financial restructuring plan.  The registration statement contains a proxy statement-prospectus describing an exchange offer to holders of Gaylord's $582.8 million principal amount of subordinated debt and a solicitation of acceptances of a prepackaged plan of reorganization.
    As previously announced, the company is simultaneously pursuing both the exchange offer and the prepackaged plan solicitation, each of which is intended to provide bondholders with the same consideration. Commenting on the rationale behind the two-pronged strategy, Gaylord Chairman and Chief Executive Officer Marvin A. Pomerantz said, "Our objective is to complete the financial restructuring and the exchange offer would accomplish that goal.  For the exchange offer to be successful, however, a 95 percent acceptance level from the bondholders is required.  While we realize it will be difficult to reach that level, we will aggressively work to complete the exchange offer.  At the same time, we will seek approval of the prepackaged plan so, if we are unable to reach the 95 percent acceptance level, we will be prepared to pursue the prepackaged plan alternative without incurring any additional delay in the restructuring process.  This approach provides the company with the best opportunity for completing the restructuring in a timely fashion."
    In an agreement reached in December 1991 on the terms of the restructuring, a steering committee of an unofficial committee of bondholders agreed to tender 95 percent of the subordinated debt owned or controlled by its members and to vote 100 percent of its subordinated debt to accept the prepackaged plan.  "The steering committee shares Gaylord's view that the restructuring is an appropriate alternative for achieving an improved capital structure for Gaylord based on current and expected industry conditions and Gaylord's financial projections.  Most importantly, the steering committee also believes that consummation of the restructuring is in the best interests of the holders of subordinated notes," said Kenneth Urbaszewski, chairman of the Steering Committee and senior vice president, Kemper Financial Services, Inc., in a letter to subordinated bondholders.
    Pomerantz noted that rather than requiring 95 percent acceptance, a prepackaged plan can be confirmed if, among those voting, it is approved by a majority in number holding more than two-thirds of the dollar amount of the bonds.  Nevertheless, terms of the plan are binding on 100 percent of the bondholders.
    Discussing the implications of pursuing a prepackaged plan, Pomerantz said, "From the start, our focus has been on a financial restructuring that affected our subordinated debt and left our trade creditors, customers and employees unaffected.  Under Gaylord's prepackaged plan, the company would continue to operate in the ordinary course of business, meeting all obligations to our customers.  Further, Gaylord has remained current with its trade creditors and expects to continue to pay trade credit and operating expenses in the ordinary course of business.  As of June 30, 1992, the company had approximately $59 million of cash on hand and approximately $29 million of bank credit available.  Should the company file a prepackaged plan, the company has entered into a commitment with its agent bank to replace the company's existing bank credit availability with a new $100 million line of credit."
    The company said that, under the terms of either the exchange offer or the prepackaged plan, for each $1,000 of claim, bondholders may elect to receive either: (1) $400 principal amount of 13-1/2 percent senior subordinated debentures due 2003, 13.1636 shares of class A common stock and 66.9433 redeemable exchangeable warrants to obtain class A common stock or (2) $1,000 principal amount of 10-1/4 percent senior subordinated PIK notes due 2001 and 6.8218 warrants.  A claim is calculated on a bondholder's principal amount of subordinated debt plus accrued and unpaid interest through Dec. 31, 1991.  On that date, aggregate subordinated bondholder claims totaled approximately $651 million.
    The company indicated that it is mailing documents to its subordinated bondholders and common stockholders who were holders of record as of the close of business on July 7, 1992.  The exchange offer and the prepackaged plan solicitation period will expire at 5 p.m., New York City time on Friday, Sept. 11, 1992, unless extended.
    BT Securities Corporation, a wholly-owned subsidiary of Bankers Trust New York Corporation, is serving as financial advisor to the company and as dealer manager for the restructuring.  The First Boston Corporation is serving as financial advisor to the company in connection with the prepackaged restructuring.  Financial advisor to the unofficial bondholder committee is Donaldson, Lufkin & Jenrette Securities Corporation and their legal advisor is McDermott, Will & Emery.
    Gaylord Container Corporation is a major national manufacturer and distributor of corrugated containers, containerboard, unbleached kraft paper, multiwall bags and grocery bags and sacks.
    -0-               7/24/92
    /CONTACT:  Kathryn Chieger of Gaylord Container, 708-405-5645/
    (GCR) CO:  Gaylord Container Corporation ST:  Illinois IN:  PAP SU:  OFR 825 07-24-92 16:59 EDT KD-OS -- NY057 -- 5740 07/31/92 16:06 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 31, 1992
Words:856
Previous Article:BROAD INC. ANNOUNCES QUARTERLY DIVIDENDS
Next Article:HELICOPTER HIGH WIRE ACT TO RESTRICT WALT WHITMAN BRIDGE ACCESS ON MONDAY
Topics:


Related Articles
GAYLORD REACHES AGREEMENT IN PRINCIPLE WITH BONDHOLDERS ON EXCHANGE OFFER TERMS
GAYLORD AMENDS REGISTRATION STATEMENT; COMBINES EXCHANGE OFFER AND PREPACKAGED PLAN SOLICITATION
GAYLORD REPORTS SECOND QUARTER LOSS
/C O R R E C T I O N -- HADSON/
GAYLORD FILES PREPACKAGED PLAN WITH APPROVAL OF BONDHOLDERS, BANKS AND EQUITY HOLDERS; FIRST-DAY MOTIONS APPROVED; OCT. 16 CONFIRMATION HEARING
GAYLORD RESTRUCTURING CONFIRMED
GAYLORD CONSUMMATES PREPACKAGED PLAN
GAYLORD FILES REGISTRATION STATEMENT COVERING $525 MILLION OF DEBT SECURITIES
Temple-Inland Inc. to Acquire Gaylord Container Corporation.
Remy Announces Launch of Solicitation of Votes for Prepackaged Reorganization Plan.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters