Integrated Electrical wins oral approval for disclosure statement

New York, March 13 - Integrated Electrical Services, Inc. said it has been given oral approval for its disclosure statement and a confirmation hearing for the plan of reorganization has been fixed for April 25.

The company added that it will emerge from Chapter 11 in "very short order." It noted that it has already received a "very high degree of support" from holders of its senior subordinated notes since 62% have already agreed to exchange the debt for stock.

The oral approval of the disclosure statement accompanying the plan was given at a hearing on Friday in the U.S. Bankruptcy Court for the Northern District of Texas.

Under the proposed plan of reorganization:

• Holders of the company's senior convertible notes will have the securities refinanced from the proceeds of a term exit facility;

• Holders of the company's senior subordinated notes will receive 82% of the new stock of the reorganized Integrated Electrical, subject to dilution from a new employee stock option plan;

• The company's existing stockholders will receive 15% of the new stock of the reorganized company;

• The company's management and employees will receive grants of about 3% of the new stock of the reorganized Integrated Electrical in the form of restricted stock grants that will vest over time;

• All undisputed priority, credit agreement, secured, unsecured, subordinated and subsidiary debtor interests claims will either be reinstated or paid in full;

• The company's other obligations under trade credit extended to the company by its vendors and suppliers will be unimpaired and will all be paid in full; and

• All pre-bankruptcy stock options, warrants and stock rights will be canceled.

In addition, a new employee stock option plan will be adopted on the effective date that will provide for the future issuance of options that may be issued to employees to purchase up to 10% of the new stock of the reorganized Integrated Electrical.

Integrated Electrical Services, a Houston-based provider of electrical services to the commercial, industrial and residential markets, filed for Chapter 11 on Feb. 14. Its case number is 06-30602.

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