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THE HALLWOOD GROUP INTENDS TO PROPOSE DEBENTURE EXCHANGE OFFER AND CASH TENDER

 THE HALLWOOD GROUP INTENDS TO PROPOSE DEBENTURE
 EXCHANGE OFFER AND CASH TENDER
 DALLAS, Oct. 23 /PRNewswire/ -- The Hallwood Group Incorporated (NYSE: HWG) announced today that it intends to commence, as soon as practicable, an offer to exchange a new series of 7 percent collateralized subordinated debentures for all of its outstanding 13.5 percent subordinated debentures due July 31, 2009, which were originally issued in May 1989 (Original Series), at the rate of $100 principal amount of new collateralized debentures for each $100 principal amount of original series debentures tendered.
 In addition, the company intends to commence simultaneously an offer to purchase for cash all of its 13.5 percent subordinated debentures due July 31, 2009, which were issued in 1991 and 1992 as payment in kind on the original series debentures (1991 and 1992 series debentures) from each holder that exchanges original series debentures pursuant to the exchange offer. The company anticipates conditioning the participation in the cash offer to purchase on a holder's contemporaneous exchange of an amount of original series debentures to be established by the company prior to commencement of the offers. The company will pay $80 cash for each $100 principal amount of the 1991 and 1992 series debentures tendered.
 "We believe that the consummation of the offers will significantly enhance the company's liquidity, improve its financial ability to achieve its business plan and reduce its interest expense," said Anthony J. Gumbiner, the company's chairman and chief executive officer.
 The proposed new collateralized subordinated debentures will require quarterly cash interest payments, be secured by a pool of assets owned by the company, be subject to mandatory redemption scheduled to retire 25 percent of the outstanding principal amount of the new debentures in the first five years, and mature prior to the maturity of and rank senior in right of payment to the original series and 1991 and 1992 series debentures.
 The exchange offer and the offer to purchase will only be made pursuant to a written offering circular, which Hallwood expects to distribute to debenture-holders within the next 30 days, and will be conditioned on the closing of a term loan with the company's lead bank, and other customary conditions. The new term loan facility will refinance the company's existing revolving credit facility with such bank.
 Hallwood is a diversified holding company that, through its subsidiaries and associated companies, is currently engaged in the commercial and industrial real estate, energy, textile products, hotel, restaurant and automotive parts distribution business.
 This announcement is neither an offer to purchase nor a solicitation of an offer to sell debentures. The offers will be made solely pursuant to a written offering circular.
 -0- 10/23/92
 /CONTACT: Mary Doyle, vice president-investor relations of The Hallwood Group Incorporated, 214-528-5588 or 800-225-0135/
 (HWG) CO: Hallwood Group ST: Texas IN: FIN SU:


TM -- NY083 -- 4432 10/23/92 19:32 EDT
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Publication:PR Newswire
Date:Oct 23, 1992
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