Wickes begins exchange offer for 11 5/8% '03 notes

Wickes Inc. said on Friday (Dec. 20) that it has begun an offer to exchange new debt for its $63.956 million of outstanding 11 5/8% senior subordinated notes due 2003.

Wickes, a Vernon Hills, Ill.-based distributor of building materials and manufacturer of value-added building components, said it would exchange an equal principal amount of its new senior secured notes due 2005 for any and all of the existing bonds.

The new notes will initially pay interest at the same 11 5/8% rate as the existing notes from the date of issuance through Dec.15, 2003 and at 18% thereafter. Interest at 11 5/8% will be paid currently in cash, while the balance will be paid currently in cash to the extent the company has excess cash flow (as defined in the indenture governing the new senior secured notes), and will accrue to the extent not paid in cash.

The new senior secured notes will be secured by liens on the company's owned real estate and equipment, subject to the priority of the liens to the company's senior lenders, and will rank equally with the company's revolving credit agreement; they will rank senior to the existing subordinated notes.

Wickes is also soliciting consents from the holders of the existing subordinated notes to amendments to the notes' indenture that would eliminate most of the covenants contained therein. It said that the three largest noteholders, representing approximately 40% of the outstanding subordinated notes, have agreed to exchange their notes under the terms of the exchange offer and to consent to such amendments.

In order for such amendments to become effective, consents must be obtained from the holders of a majority of the outstanding subordinated notes.

The exchange offer will expire at 5 p.m. ET on Jan. 22, 2003, subject to possible extension. It is not subject to any minimum amount of subordinated notes being exchanged. But the closing of the exchange offer is subject to the company obtaining the consent of its senior lenders or the refinancing of its senior debt with a new senior lender who consents to the exchange offer. Wickes warned that it could give no assurances that such consent or refinancing will be obtained, although it said that talks have begun with a potential new senior lender to refinance the senior debt.

Wickes additionally said that its exchange offer contemplates a $4.98 million mandatory redemption in cash scheduled for the new senior secured notes' first interest payment date, March 17, 2003, as a result of the previously announced Lanoga sale proceeds (on Oct. 30, Wickes said it had agreed to sell substantially all of the assets of its operations in Wisconsin and northern Michigan to Lanoga Corp., through its United Building Centers division. Completion of the sale, at a price of 55.253 million, plus an additional net amount of approximately $20 million for the value of the inventory and accounts receivable of the business operations sold, was announced on Dec. 16).

The mandatory redemption proceeds, which will be applied to the new senior secured notes based upon the 85% applicable optional redemption price, will be shared pro rata based on the aggregate principal amount of existing senior subordinated notes exchanged.

D. F. King & Co., Inc. (call 800 859-8508 toll-free in the U.S.) is the information agent. The exchange agent is HSBC Bank USA (call 718 488-4475 (attn: Paulette Shaw). Investors with further questions about the exchange transaction can call Wickes at 847 367-3414.

Lexington Precision extends exchange offer for 12¾% notes

Lexington Precision Corp. said on Friday (Dec. 20) that it had again extended its previously announced offer to exchange new debt, plus stock-purchase warrants and a participation payment, for its outstanding 12¾% senior subordinated notes which came due in 2000 but which were not redeemed at that time. The offer was extended to midnight ET on Jan. 10, 2003, subject to possible further extension, from the previous Dec. 20 deadline.

Lexington said that as of Dec. 20, holders had tendered $27,209,125 of the notes, or 99.3% of the outstanding amount, unchanged from the amount announced on Oct. 31 and at several subsequent expiration deadline extension announcements. While that has satisfied the 99% minimum tender condition to the exchange offer, the company said that a number of other conditions have not yet been satisfied, including the completion of a new senior secured credit facility on terms satisfactory to the company.

AS PREVIOUSLY ANNOUNCED Lexington Precision, a New York-based manufacturer of rubber and metal components for the automobile and medical devices industries, said on July 10 that it had begun an exchange offer for its $27.412 million of outstanding 12¾% notes. Under the terms of the exchange, which is open only to holders of record (as of July 1) of the existing notes, the company would give them a principal amount of new 11½% senior subordinated notes due 2007 equal to the sum of the principal amount of the outstanding 12¾% notes, plus the accrued interest on those notes from Aug. 1 1999, through April 30 of this year. The company said that accrued interest would total $350.625 per $1,000 principal amount of the existing notes. If all of the outstanding existing notes were to be tendered and the exchange offer completed Lexington Precision would issue new 11½% notes to cover a total of $9.611 million of accrued interest from the existing notes.

Lexington Precision initially said that the exchange offer would expire at midnight ET on Aug. 7, although this deadline was subsequently extended. It said that interest on the new 11½% notes would accrue from May 1 of this year; interest for the three-month period ended July 31 would be paid on the issue date of the 11½% notes, and after that, would be payable quarterly on each November 1, February 1, May 1, and August 1. The company said that holders of the new 11½% notes would also receive a participation fee equal to $22.20 per $1,000 principal amount of 11½% notes issued, payable in three equal installments on Sept. 30, 2002, Dec. 31 and March 31, 2003. Lexington will also issue to the holders of the new notes warrants to purchase 10 shares of common stock per $1,000 principal amount of notes; the warrants would allow their holders to buy the stock at a price of $3.50 per share at any time during the period from Jan. 1, 2004 through Aug. 1, 2007. Prior to Jan. 1, 2004, the warrants will not be detachable from the 11½% notes and will be transferable only as part of a unit with the notes.

The company said that the exchange offer is being undertaken as part of a larger comprehensive financial restructuring plan that would also involve an extension of the company's 10 ½% senior notes and 14% junior subordinated notes, and a refinancing of the company's senior, secured credit facilities. It said that completion of the exchange offer would be subject to a number of conditions, including the refinancing of Lexington's other debt on satisfactory terms. Completion of the exchange offer would also be subject to the condition that at least 99% of the outstanding 12¾% notes be tendered for exchange and not withdrawn. The company warned that if the exchange offer is completed, it does not presently intend to pay principal or accrued interest on any untendered 12¾% notes. It further said that the exchange offer reflects an agreement in principle that it reached with the four largest holders of its 12 ¾% notes, who among them control a total of $20.49 million of the 12¾% notes, or 74.7% of the $27.412 million outstanding.

On Aug. 7, the company extended the expiration of the exchange offer to 12 midnight ET on Aug. 30, and on Aug. 30, it said that it had again extended the offer to midnight ET on Sept. 30 and said that it had received tenders of $27,131,875 of the notes, or 98.98% of the outstanding amount, just shy of the 99% minimum tender condition. On Sept. 30, Lexington announced the further extension of the offer to 12 midnight ET on Oct. 18, and said that it had received tenders of $27,208,875 of the notes, or slightly more than 99% of the outstanding amount, satisfying the minimum tender condition to the consummation of the exchange offer. On Oct. 18, the company announced the further extension of the offer to 12 midnight on Oct. 31, subject to possible further extension, and said that as of Oct. 18, some $27,209,125 of the notes, or slightly more than 99% of the outstanding amount, had been tendered.

On Nov. 1, the company announced the further extension of the offer to midnight ET on Nov. 15, subject to possible further extension, from the previous Oct. 31 deadline. It reported the same level of noteholder participation in the offer as previously. The company further announced on Nov. 14 that it was extending the offer to midnight ET on Dec. 4, with the same level of noteholder participation as previously announced. On Dec. 4, it announced that the offer had been extended to Dec. 20, with the same level of noteholder participation as previously announced.

Evenflo extends 11¾% '06 note exchange offer

Evenflo Co. Inc. said on Wednesday (Dec. 18) that it has extended the expiration date of its previously announced offer to exchange either equity or cash for its 11¾% Series B senior notes due 2006 to 12 noon ET on Dec. 18, 2002, subject to possible further extension, from the original deadline of 12 midnight ET on Dec. 17. As of that original deadline, approximately $110 million aggregate principal amount of the senior notes, or 100% of the outstanding amount, had been tendered for exchange.

AS PREVIOUSLY ANNOUNCED: Evenflo, a Vandalia, Ohio- based maker of infant and juvenile products, said on Nov. 19 that it had reached agreement with its lenders, certain noteholders and its controlling shareholder - an affiliate of the investment firm of Kohlberg Kravis Roberts & Co., LP - for a recapitalization of the company.

Evenflo said that as part of the recapitalization, it will offer the holders of its $110 million 11¾% notes the right to exchange their notes for equity in the recapitalized company or $150 cash per $1,000 principal amount of notes tendered.

The company agreed to commence a tender and exchange offer reflecting such exchange as soon as practicable. It said that if all noteholders elect to receive equity in the exchange offer, the noteholders in the aggregate would be entitled to receive approximately 40% of Evenflo's common equity after the recapitalization. The tender and exchange offer will be conditioned on several items, including 100% participation by the noteholders.

The company said that noteholders collectively holding more than 70% of the outstanding notes have agreed to support the recapitalization, along with Evenflo's lenders and its controlling shareholder.

Terms of the recapitalization call for an additional approximately $15 million of bank debt to be extinguished, while the company also expects to receive from its controlling shareholder new cash equity of approximately $18 million, plus the amount needed to pay those noteholders who elect to receive cash instead of equity in connection with the recapitalization, with this cash being applied to purchase new common equity in the company.

If the recapitalization is successful, it would reduce the company's leverage from $215 million to $72 million. The recapitalization will have no effect on trade creditors or customers.

The company expects to complete the recapitalization, which is subject to documentation and other customary conditions, by the end of the year.

Six Continents plc sets 10 3/8% '16 debenture stock holders meeting

Six Continents plc said on Wednesday (Dec. 18) that it had set Jan. 14 as a meeting date for the holders of its 10 3/8% debenture stock due 2016. The holders will consider the company's previously outlined plans to repurchase the £250 million 10 3/8% debentures.

Six Continents, an Atlanta-based lodging chain operator, said that at the meeting it will seek the approval of the debenture holders to redeem the debenture by way of the company exercising a call option to be inserted in the terms and conditions of the debenture.

The company said that if the extraordinary resolution is passed, it shall redeem all - but not some only - of the debenture by May 31, 2003. The redemption price for the debenture will be based upon a fixed margin of 100 basis points over the yield of the 8% U.K. Treasury Gilt due December, 2015, with prices calculated by the consent co-ordinator using standard market convention.

Salomon Brothers International Ltd. ("Schroder Salomon Smith Barney") (call the Liability Management Group at +44 20 7986-8969) is the consent co-ordinator.

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