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REX-PT HOLDINGS INC./REXNORD CORPORATION PLANS INITIAL PUBLIC STOCK OFFERING AND NEW DEBT OFFERING

 REX-PT HOLDINGS INC./REXNORD CORPORATION
 PLANS INITIAL PUBLIC STOCK OFFERING AND NEW DEBT OFFERING
 MILWAUKEE, April 17 /PRNewswire/ -- Rex-PT Holdings Inc., the parent of Rexnord Corporation, announced today a broad recapitalization plan and filed registration statements with the Securities and Exchange Commission for an initial public offering of 8 million shares of common stock and $150 million of Senior Notes due 2002.
 An additional 1.2 million shares may be issued to cover over-allotment options granted to underwriters for the offering as well as an additional $22.5 million of Senior Notes. As part of the recapitalization, Rexnord Corporation will merge into Rex-PT with the merged company's name changed to Rexnord Corporation. As a result, the offerings are being made by the combined entity, Rexnord Corporation. The offerings are expected to take place on or shortly before June 30, 1992.
 In addition to the two offerings, the company plans to increase by $60 million the amount of borrowings available under its existing Credit Agreement and extend the maturity dates of such borrowings. Total funds available from recapitalization are projected to be approximately $385 million. These proceeds will be used to retire Rexnord Corporation's existing $250 million Senior Subordinated Notes, redeem those shares of preferred stock that are not owned by affiliates of The Fairchild Corporation (NYSE: FA), owner of 42 percent of the outstanding common stock and approximately 52 percent of the outstanding preferred stock of Rex-PT Holdings, Inc., and to pay financing and transaction costs. Fairchild has agreed to exchange the preferred stock it owns for common stock at the public offering price.
 The company currently estimates that the initial public offering price will be between $21 and $23 per share, after a 1-for-2 reverse stock split of the existing common shares. Following the common stock offering and the exchange by Fairchild of preferred stock for common stock, there will be approximately 17 million common shares outstanding. The offerings of the common stock and the Senior Notes are expected to be made following SEC review.
 The Senior Notes will mature in 2002 and will not be redeemable by the company prior to the fifth anniversary of their issuance. The Notes will be unsecured and will rank equally with existing and future senior indebtedness.
 The company also expects to commence an offer for all of Rexnord's outstanding 13 5/8-percent Senior Subordinated Notes due 1998 at a price of $1,090 plus accrued interest for each $1,000 principal amount of Notes tendered. This price includes a payment of $30 for each Note tendered before May 21, 1992. These Notes mature on Aug. 15, 1998, and are currently redeemable by Rexnord at a price of $1,085.20 for each $1,000 principal amount plus accrued interest, declining to $1,068.20 on Aug. 15, 1992. The terms and conditions of the tender offer will be described in an offer to purchase which the company expects to distribute to holders of the Notes within 10 days.
 As part of the recapitalization, the company will redeem all outstanding shares of preferred stock that are not owned by The Fairchild Corporation or its subsidiaries. It is estimated that there will be 3.0 million of such preferred shares outstanding on the anticipated effective date of the recapitalization, which includes accrued and unpaid payment-in-kind (PIK) dividends. The redemption price will be $26 per share, and the total redemption value is expected to be approximately $78 million.
 The Fairchild Corporation will own approximately 3.3 million shares of preferred stock, including PIK dividends, on the recapitalization date. Fairchild and the company have reached an agreement providing for the exchange, at $26 per share, of all preferred stock held by Fairchild for shares of common stock valued at the public offering price. In addition, Fairchild has agreed to exercise an option it possesses to purchase additional shares of common stock held by an independent company. Including these option shares, shares now held by Fairchild and the shares to be received in the preferred stock exchange, it is projected that Fairchild will own approximately 45 percent of the outstanding common stock after consummation of the recapitalization.
 The proposed amendments to the existing Credit Agreement will increase the term loan facility from approximately $120 million to $180 million, continue the existing $100 million revolving credit facility, and defer existing principal payments to later years. The maturity of both the term loan and revolving credit facility will be extended from Sept. 1, 1995, to Sept. 1, 1998.
 The offering of the shares and Senior Notes is contingent upon the purchase of the outstanding Senior Subordinated Notes, the effectiveness of amendments to the Credit Agreement, and the redemption or exchange of the outstanding preferred stock.
 The company also said today that it expects to incur an after-tax charge of approximately $23 million in the quarter ended June 30, 1992, related to the recapitalization. This expense includes the payment of premiums in connection with retirement of the Senior Subordinated Notes and write-off of deferred financing costs.
 Donaldson, Lufkin & Jenrette Securities Corporation and Bear, Stearns & Co. Inc. will act as managing underwriters for the initial public offering of shares of common stock in the United States and Canada. Shares will also be offered outside the United States by international underwriters; Donaldson, Lufkin & Jenrette Securities Corporation; and Bear, Stearns International Limited. Citicorp Securities Markets, Inc., Bear, Stearns & Co. Inc., and Donaldson, Lufkin & Jenrette Securities Corporation will act as managing underwriters for the issuance of the Senior Notes. Bear, Stearns & Co. Inc. and Citicorp Securities Markets, Inc. will act as dealer-managers for the tender offer.
 Rexnord Corporation is currently celebrating its 100-year anniversary. Incorporated as Chain Belt Company in 1892, the company was later renamed Rexnord Inc. Rexnord Corporation was formed in August 1988 through the combination of the former Mechanical Power Division of Rexnord Inc. and PT Components Inc.
 Rexnord is a leading worldwide manufacturer and supplier of power transmission components and related products. Rexnord employs approximately 5,100 persons at 18 domestic and 10 international manufacturing locations and at other offices, service centers and warehouses throughout the world.
 The shares of common stock and Senior Notes will be offered only pursuant to a prospectus.
 A registration statement relating to the shares of common stock has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sales of these securities in any state in which such offer, solicitation or sales would be unlawful prior to registration or qualification under the securities laws of any such state.
 -0- 4/17/92
 /CONTACT: T.J. Jansen, 414-643-2252, or C.R. Roy, 414-643-2249, both of Rexnord Corporation/
 (FA) CO: Rexnord Corporation; Rex-PT Holdings Inc.; The Fairchild
 Corporation ST: Wisconsin IN: AUT SU: OFR TNM


SB-SM -- DE004 -- 9701 04/17/92 14:03 EDT
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Publication:PR Newswire
Date:Apr 17, 1992
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