Evercom completes 11% '07 notes exchange, restructuring

Evercom, Inc. said on Wednesday (Feb. 19) that it had completed its previously announced offer to exchange equity in the restructured company for all of its outstanding public debt, and had also completed the larger financial restructuring of the company, of which the exchange offer for its 11% senior notes due 2007 was a part.

The offer was completed as scheduled as of 10 a.m. ET on Wednesday, with no further extension. A total of approximately 98.2% of the notes were exchanged for 98% of the equity in the restructured Evercom.

Evercom also said that in connection with the restructuring, its existing stockholders will receive warrants to acquire an aggregate of 2% of the equity in the restructured company, and will also receive warrants to acquire additional equity at substantially higher values. The company will circulate letters of transmittal shortly to the existing stockholders so that they can obtain their equity in the restructured Evercom.

The Bank of New York (call 212 815-5788, attention William Buckley) was the exchange agent for the offer.

AS PREVIOUSLY ANNOUNCED: Evercom, an Irving, Texas-based provider of telecommunications services to the inmate populations at correctional facilities, said on Dec. 5 that it had reached an overall agreement in principle with its senior lenders and the ad hoc committee of subordinated bondholders on restructuring the company's balance sheet.

Evercom said that the restructuring would result in the holders of the company's publicly traded subordinated debt exchanging their debt for 98% of the equity of the restructured company. Existing equity holders would retain a 2% interest in the restructured company and have warrants to subscribe for additional equity at significantly higher prices.

Evercom said it expected to mail documents relating to the exchange offer to its bondholders in December and said it anticipates closing the transaction early this year, subject to any regulatory reviews.

The company added that following the conversion of the publicly traded bonds, its total outstanding indebtedness would be reduced to a level that could comfortably be serviced by cash flow from operations.

On Jan. 31, Evercom said that it had extended the pending exchange offer for the 11% notes, which began on Dec. 24 (no public announcement of the offer was made at that time); the offer was extended to 5 p.m. ET on Feb. 5.

It said that as of Jan. 31, approximately 91% of the $115 million of outstanding notes had been tendered for exchange.

On Feb. 5, Evercom again extended the offer, to Feb. 6, and gave out the same participation levels as before.

On Feb. 6, Evercom said it had again extended the offer, to Feb. 7, and said that as of the previous Feb. 6 deadline, approximately 93% of the noted had been tendered for exchange, up from 91% previously.

On Feb. 9, Evercom said that it had received the tender of approximately 98.2% of its 11% notes, up from 93% previously; the new amount was sufficient to satisfy the offer's minimum tender condition.

Evercom said that it was finalizing the necessary documentation of its senior credit facility and awaiting customary regulatory clearances, which it described as "well underway," before formally consummating the exchange offer.

The company therefore again extended the offer deadline, to 5 p.m. ET Feb. 14, subject to possible further extension, from the previous deadline at 5 p.m. ET Feb. 7.

Grupo TMM amends and extends exchange offers for 9½% '03, 10¼% '06 notes

Grupo TMM SA said on Tuesday (Feb. 18) that it had amended and extended its previously announced exchange offers to exchange new longer-maturity debt for all of its outstanding 9½% senior notes due 2003 and its 10¼% senior notes due 2006.

The exchange offers were extended to 5 p.m. ET on Feb. 25, subject to possible further extension, from the previous Feb. 18 deadline. As of that previous deadline, approximately 30.79% of the outstanding 9½% notes, or $54.458 million principal amount, had been tendered and not withdrawn, and 67.21% of the outstanding 10¼% notes, or $134.425 million principal amount, representing a majority of the notes, had been tendered and not withdrawn.

The amounts tendered were up from the $54.198 million (30.64%) of the 9½% notes and $109.164 million (54.58%) of the 10¼% notes that had been tendered as of the original deadline at 5 p.m. ET on Feb. 11.

The minimum tender condition of at least a majority of the 10¼% notes has been fulfilled, while the 85% minimum tender condition for the 9½% notes remains unmet at this time.

Grupo TMM said that the exchange offers and related consent solicitations are being amended to include warrants to purchase American Depositary Shares of Grupo TMM as part of the consideration being offered to holders of the 9½% notes whose notes are tendered and accepted in the exchange offer; to offer all holders of the 9½% notes whose notes are tendered and accepted the consent fee of $5 per $1,000 principal amount of notes; to reduce the minimum tender condition for the 9 ½% notes from 85% of the notes to 80%; and to extend the expiration date for both exchange offers and consent solicitations, as noted. All other terms and conditions of the exchange offers and the consent solicitations remain the same.

Salomon Smith Barney Inc. is acting as the dealer manager for the exchange offers and consent solicitations. Mellon Investor Services (call toll-free at 888 689-1607; banks and brokers call 917 320-6286) is the information agent.

AS PREVIOUSLY ANNOUNCED, Grupo TMM, a Mexico-City-based provider of land and ocean transportation services, said on Aug. 29 that it intended to offer to exchange new debt securities for all of its outstanding 9½% and 10¼% notes. It said the exchange offers would be undertaken consistent with its previously announced plan to extend the company's debt maturities and obtain additional financial flexibility.

TMM said that the terms of the planned exchange, including the interest rate of the new debt securities, had not been finalized, but the securities are expected to be senior unsecured debt of Grupo TMM maturing in 2009. In addition, it said that the new debt securities would be guaranteed on a senior unsecured basis by TMM Holdings SA de CV, a newly-formed, wholly-owned subsidiary of Grupo TMM, which would indirectly hold all of its parent's approximately 51% voting and 38.4% effective economic interest in another subsidiary, Grupo TFM SA de CV, through which Grupo TMM conducts its rail operations.

Grupo TMM further said that in connection with the exchange offers, it expected to solicit consents from the holders of the outstanding 9½% and 10¼% notes, seeking to amend or eliminate certain of the covenants contained in the notes' indentures. It said that holders who tender notes and give their consents prior to the deadline that would be established for the consent solicitation would be entitled to receive a cash consent fee. The amendments would only become effective upon completion of the exchange offers and consent solicitations, which would be described in detail in the official offering material.

Grupo TMM did not formally set down a timetable for the proposed exchange offers and related consent solicitations, other than that the exchange offers would begin once the company has completed its regulatory filings and obtained all necessary governmental authorizations. The company said that it expected that the exchange offers to be completed early in the fourth quarter. Grupo TMM said it had filed a registration statement relating to the exchange offers with the U.S. Securities and Exchange Commission, and was expecting to commence the offers as soon as practicable after the registration statement was declared effective and it had obtained the necessary authorizations from the Comision Nacional Bancaria y de Valores de Mexico.

On Dec. 26, Grupo TMM said that it had begun its previously announced offers to exchange new, longer-maturity debt for all of its outstanding 9½% and 10¼% notes, and said the exchange offers would expire at 5 p.m. ET on Feb. 11, 2003 (this deadline was subsequently extended).

Grupo TMM said it would offer a like principal amount of its new 10¾% percent senior notes due 2009 for the existing notes; the new notes are to be issued at the time the exchange offers close. They would be guaranteed on a senior unsecured basis by TMM Holdings, SA de CV, a wholly owned subsidiary that indirectly owns all of TMM's interest in Grupo Transportacion Ferroviaria Mexicana, SA de CV, which in turn operates TMM's rail operations.

The company said that concurrently with the exchange offers, it was also soliciting consents from holders of the existing notes for certain amendments which would eliminate certain restrictive covenants and amend certain other provisions of the respective indentures under which the existing notes were issued. Holders tendering their notes in the exchange offers would be considered to have given their consent to the proposed amendments applicable to the series of existing notes being tendered.

Subject to the terms and conditions contained in the prospectus and letter of transmittal related to the exchange offers and consent solicitations, Grupo TMM said it would pay a cash consent fee in an amount of $5 per $1,000 principal amount of existing notes validly tendered and not subsequently revoked by the consent payment deadline of 5 p.m. ET on Jan. 28, subject to possible extension.

The company said the obligation of Grupo TMM to consummate either exchange offer would be conditioned upon, among other things, receipt of valid and unrevoked tenders representing at least 85% of the outstanding principal amount of the 9½% notes and at least a majority of the outstanding principal amount of the 10¼% notes.

It said tenders and the related consents could not be withdrawn at any time after the consent payment deadline, unless that deadline were to be extended by Grupo TMM with respect to one or both series of existing notes.

On Feb. 12, Grupo TMM said that it had extended the expiration date of the offers to 5 p.m. ET on Feb. 18, subject to possible further extension, from the original Feb. 11 deadline. As of 5 p.m. ET on Feb. 11, $54.198 million of the 9½% notes, or approximately 30.64% of the outstanding amount, and $109.164 million of the 10¼% notes, or 54.58% of the outstanding amount, had been tendered and not withdrawn.

While that fulfilled the minimum tender condition of at least a majority of the 10¼% notes, the 85% minimum tender condition for the 9½% notes remained unmet at that time.

Lexington Precision extends exchange offer for 12¾% notes

Lexington Precision Corp. said on Tuesday (Feb. 18) 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 Feb. 24, subject to possible further extension, from the previous Feb. 18 deadline.

Lexington said that as of Feb. 18, 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 in a number of 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, 2002. The company said that accrued interest would total $350.625 per $1,000 principal amount of the existing notes. It said that 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 multiple times. It said that interest on the new 11½% notes would accrue from May 1, 2002; 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, 2002 and March 31, 2003. Lexington further said it would 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 it was undertaking the exchange offer 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 were to be completed, it would not 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. A series of similar announcements further extending the offer were made, most recently on Feb. 12, with the same level of noteholder participation as previously announced.

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