NEW CENTURY REACHES FINANCIAL RESTRUCTURING ACCORD
NEW CENTURY REACHES FINANCIAL RESTRUCTURING ACCORD CLEVELAND, Nov. 22 /PRNewswire/ -- The board of directors of New
Century Communications, Inc., parent of Edgell Communications, Inc., has reached an agreement in principle with the company's major lenders and investors on a financial restructuring plan.
The plan will convert a substantial portion of the company's outstanding debt and all of its preferred stock to equity. This will reduce the company's current debt and preferred stock from approximately $368 million to approximately $192 million. The restructuring plan also will allow the company to invest more resources in improvements and development of its businesses. Richard B. Swank, chairman and chief executive officer of Edgell Communications, said, "In supporting this plan, the lenders and investors are expressing their confidence in the capabilities of Edgell's personnel and in the company's program to enhance its principal lines of business. "Currently, we're investing nearly $4 million in additional research activities, a new electronic publishing system, and customer-focused training programs for our staff," he said. "We have relocated facilities, revamped our portfolio, and realigned our organizational structure. I believe that this company now is leaner and more cost-effective and will be highly responsive to the needs of customers faced with rapidly changing business environments." Most of the company's outstanding debt and preferred stock was incurred when New Century and its wholly owned subsidiary, Edgell Communications, were created at the end of 1987 through a leveraged buyout of the business publishing, exposition and school supplies distribution businesses of Harcourt Brace Jovanovich, Inc. by Kidder, Peabody Group, Inc., several members of Edgell's senior management and other investors. The company's restructuring plan calls for bondholders and equity investors to exchange their present securities for new securities. General Electric Capital Corporation (GECC) and seven other lenders will continue to provide long-term financing for the company. GECC also will continue to provide short-term working capital financing. All of the company's lenders and more than 75 percent of its debenture holders have indicated their present intention to accept the plan. Swank said the company will secure the financial restructuring plan as quickly as possible through a "prepackaged" Chapter 11 filing after obtaining the formal acceptances of its lenders and investors. He estimated that the plan should become effective in approximately three months. Edgell's subsidiaries will not be included in the filing. The subsidiaries are Beckley-Cardy, a school supplies distributor and Davidson Printing Company. A prepackaged Chapter 11 is a procedure that facilitates the various legal considerations involved in a restructuring, and typically receives more rapid court confirmation than a traditional Chapter 11 reorganization plan. "This action should not be misinterpreted," Swank said. "The financial restructuring is driven by the need to alleviate present and future debt service constraints. Edgell's businesses are fundamentally sound and have burgeoning potential," he said. "The financial restructuring plan will assist us in attaining this potential and in building our businesses for the future." -0- 11/22/91 /CONTACT: Mary Abood of New Century Communications, Inc., 216-826-2804/ CO: New Century Communications, Inc. ST: Ohio IN: PUB SU: RCN CG -- CL005 -- 6352 11/22/91 11:49 EST
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|Date:||Nov 22, 1991|
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