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HARVARD AND DEBENTUREHOLDERS REACH REVISED AGREEMENT IN PRINCIPLE

HARVARD AND DEBENTUREHOLDERS REACH REVISED AGREEMENT IN PRINCIPLE
 FARMINGDALE, N.J., April 9 /PRNewswire/ -- Dr. William D. Hurley, chairman and chief executive officer of Harvard Industries, Inc., announced today that the company had reached a revised agreement in principle with its official committee of debentureholders on a plan of reorganization that would convert the company's outstanding $200 million of debentures, plus accrued interest, into equity securities.
 The agreement contemplates that the debentures would exchange their debentures for $75 million of 14.25 percent pay-in-kind preferred stock due 1998 plus 91 percent of the common stock of the reorganized company. The remaining 9 percent would be retained by the by the current equity owners. All of the common stock issued to Hurley would be Class A common stock, and all of the stock issued to the debentureholders would be Class B common stock.
 If the company achieves certain operating targets over the next three years, the current equity owners would increase their ownership to 37 percent of the common stock. The Class A common stock would have the right to elect a majority of the company's board of directors unless the company failed to achieve certain control targets, based on operating income, over the next three years. If any of the control targets were not achieved, the Class A common stock would automatically convert into Class B common stock and the Class B common stock would then have the right to elect all of the company's directors.
 "The plan would provide Harvard with the equity base it needs to become an increasingly important supplier to the automotive industry and to realize the full potential of our operating divisions," said Hurley, who will continue to direct the company's operations as its chairman and chief executive officer.
 Wilbur L. Ross, Jr., senior managing director of Rothschild Inc., financial advisor to the debentureholders' committee, added: "We believe that the combination of preferred and common stock and the operating targets will result in a fair allocation of value among the constituents."
 Michael Hoffman, general partner of The Blackstone Group, financial advisor to Harvard said: "The consensual plan allows the company to proceed with its business plan and is fair and equitable to all constituencies."
 The plan is expected to be submitted to the bankruptcy court and mailed to creditors as soon as possible.
 Harvard Industries' primary business is the designing, engineering and manufacturing of automotive accessories, parts and components principally for automobile companies producing cars and trucks in North America. The company is a leading supplier to the domestic automobile market. Harvard Industries also manufactures specialty fasteners and armament and electronic products for the aerospace industry, and office furniture.
 -0- 4/9/92
 /CONTACT: William D. Hurley of Harvard Industries, 908-938-9000, or Wilbur L. Ross, Jr. of Rothschild, 212-757-6000, or Michael Hoffman, 212-836-9858, of Blackstone Group/ CO: Harvard Industries, Inc.; Blackstone Group L.P. ST: New Jersey IN: AUT SU:


SM-KW -- NY089 -- 6989 04/09/92 17:31 EDT
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Publication:PR Newswire
Date:Apr 9, 1992
Words:494
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