Iron Age agrees restructuring with noteholders receiving stock, convertibles

New York, Oct. 24 - Iron Age Corp. and its parent Iron Age Holdings Corp. said it has reached an agreement in principal with holders of a majority of the principal amount of its notes on a debt restructuring.

Under the proposal, the noteholders will receive all the common stock of the company and new convertibles.

The agreement is with holders of a majority of the principal amount of Iron Age Corp.'s 9 7/8% senior subordinated notes due 2008 and Iron Age Holdings' 12 1/8% senior discount notes due 2009.

The exchange will be implemented through an offer which the Pittsburgh specialty distributor of work and safety footwear said it plans to launch in the week of Oct. 27.

Assuming all the notes are tendered, holders of the 9 7/8% notes will receive 95% of the stock of a new holding company, to be called IAC Holdings, Inc., and $8 million principal amount of 15% PIK subordinated convertible secured notes due 2008.

Holders of the 12 1/8% notes will receive 5% of the stock of IAC Holdings, subject to dilution on conversion of the new convertibles.

IAC Holdings will own all the common stock of Iron Age Corp.

The exchange is conditional on a number of conditions including the tender of 100% of the outstanding 12 1/8% notes and at least 99% of the outstanding 9 7/8% notes and the amendment and restatement of the company's senior credit agreement.

Iron Age said it had agreed an additional waiver through Dec. 5 with its senior lenders, with Wells Fargo Foothill, Inc. as agent.

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