Printer Friendly


 UPPER SADDLE RIVER, N.J., Sept. 8 /PRNewswire/ -- New Valley Corporation disclosed today that it has reached an agreement in principle with a new equity investor that will form the foundation for the formulation of a financial plan of reorganization, enabling the corporation to settle all of its outstanding creditor obligations and emerge from Chapter 11 early in 1994. The outline of the plan was presented in Federal Bankruptcy Court in Newark in the course of a hearing on New Valley's request for an extension of the period during which it retains the exclusive right to file a reorganization plan.
 At the conclusion of today's hearing, the court granted an extension of that exclusivity period to Nov. 26, 1993.
 New Valley's proposed plan of reorganization, as described in oral testimony by Robert J. Amman, president and chief executive officer, is premised upon the infusion of $50 million in new equity capital and the raising of at least $225 million through the public or private sale of new debt securities. The company intends to file its formal plan as soon as practicable and will seek approval of creditors and the Bankruptcy Court by the end of 1993.
 With regard to the equity infusion, Mr. Amman disclosed that the corporation has reached an agreement in principle with Electronic Data Systems Corporation (EDS), which has been providing management information services to New Valley and its subsidiaries for the past eight years. Under this agreement, which is conditioned upon the negotiation of a definitive contract and approval by the boards of directors of both EDS and New Valley, EDS will provide $50 million in cash to New Valley and receive a minority equity interest in the reorganized company. In addition, EDS will enter into an expanded contractual arrangement with New Valley for the provision of services in support of the operation of New Valley's business.
 Under the plan proposal, the balance of the equity in the reorganized company will be distributed as new common stock to holders of New Valley's Class A senior preferred shares. The existing New Valley Class B convertible preferred shares, as well as the existing common shares, will be extinguished as part of the plan.
 With respect to the sale of the new public debt securities, Mr. Amman stated that the corporation is discussing its plans for this financing with several investment banking firms and expects to reach a decision shortly on which firm or firms will manage the offering. It is anticipated that the placement of these securities, in the form of 10-year unsecured notes, will be completed during the first quarter of 1994 -- following court confirmation of the reorganization plan.
 Commenting on the agreement with EDS, Mr. Amman said: "This alliance with EDS is a key component of our reorganization plan. We believe it will stimulate the profitable growth of our company in the post-bankruptcy period and will enable us to seize more of the attactive opportunities available in the expanding market for financial and messaging services."
 New Valley Corporation conducts its principal operations through its wholly owned subsidiary, Western Union Financial Services, Inc. (FSI), which provides a variety of financial and messaging services. Its principal service is Western Union Money Transfer, through which funds can be transferred rapidly to any location within the United States and to many locations throughout the world. Other financial services offered by FSI include collection services, payment services, a secured credit card and a telephone debit card. New Valley also provides Western Union Mailgram(R) and other messaging services to high-volume commercial users through its Western Union Priority Services unit.
 -0- 9/8/93
 /CONTACT: Warren Bechtel of New Valley, 201-818-5790 or 212-868-8888/

CO: New Valley Corporation; Electronic Data Systems Corporation ST: New Jersey IN: FIN TLS SU: FNC

GK -- NY073 -- 9932 09/08/93 15:28 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 8, 1993

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters