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MILESTONE MEETING BETWEEN O&Y AND BANKS

 MILESTONE MEETING BETWEEN O&Y AND BANKS
 LONDON, May 7 /PRNewswire/ -- In a milestone meeting held today at


Canary Wharf, Olympia & York (O&Y) invited its lending banks to become partners in the company's future.
 After decades of operating as an entirely private organization, O&Y announced it has decided to invite its banks to become shareholders in the company and in its projects worldwide.
 Today, O&Y presented 15 of its principal creditors with a long-term restructuring proposal incorporating five-year business plans for each of the major operations, cash flow estimates for the United States, Canada and the United Kingdom, and a debt restructuring plan.
 The proposal involves the banks receiving equity in both the parent company Olympia & York Developments Limited (OYDL) and Canary Wharf.
 "We believe that the proposals based on the five-year business plan of each of O&Y's major operations respond, constructively, both to our needs and to the suggestions arising from meeting with lenders held to date in Toronto, New York and London," said Gerald (Jerry) Greenwald, president, Olympia & York Developments Limited.
 "We plan to move forward from here with further meetings with each lender group with the objective of concluding the agreements necessary to implement the plan. Given the support we have received from our lenders to date, we are confident of positive developments in the coming weeks," he concluded.
 Olympia & York Restructuring
 Executive Summary
 Overall approach:
 -- Based on five-year business plans for each of the company's major operations.
 -- Most debt principal to be extended five years to allow for recovery in asset values.
 -- Parallel lender group negotiations anticipated as part of a global restructuring.
 OYDL Debt/Guaranteed Debt:
 -- Principal obligations to be deferred for five years and then amortized over five years.
 -- Dividends and cash flow from supporting collateral to be applied to interest payments.
 -- Interest shortfalls to be converted into non-voting common equity shares of OYDL.
 -- Equity available to lenders of up to 20 percent.
 -- Company to have right to redeem at agreed rates.
 -- Public registration of shares within seven years.
 Canary Wharf funding:
 -- 300 million pounds sterling of additional commitments sought to complete and tenant initial phases of the project.
 -- Redemption of debt envisaged through refinancing and asset sales.
 -- Interest to remain current.
 -- Equity to be granted up to 30 percent interest in initial phases.
 Canada funding:
 -- Permission sought to draw remaining $130 million of existing $240 million facility from company's Canadian bankers.
 -- Interest to remain current.
 Conclusion:
 -- Banks not required to give up current level of debt claims.
 -- Equity returns offered in compensation for deferral of interest payments.
 -- Strong incentive to management to resume cash interest payments, improve asset values to minimize dilution.
 -- Restoration of asset values will ensure repayment of outstanding indebtedness.
 -0- 5/7/92 R
 /CONTACT: Frank Ternan in Toronto, 416-862-5324; Peter Rosenthal in New York, 212-489-6900; or Georgie Gibbs in London, 071-494-4044, all of O&Y/ CO: Olympia & York ST: IN: SU:


KD-GK -- NY080 -- 7778 05/07/92 15:59 EDT
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Publication:PR Newswire
Date:May 7, 1992
Words:495
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