Ampex offers new notes with interest in patent licenses in restructuring

New York, Jan. 24 - Ampex Corp. is offering new 12% senior secured notes due 2008 with an interest in its patent licenses in exchange for its outstanding $44 million of 12% senior notes due 2003 as part of a debt restructuring, according to a filing with the Securities and Exchange Commission.

Holders will receive new notes equivalent to the principal amount of the old notes plus accrued interest on the old notes at 12% and interest on defaulted interest at 13%.

The exchange is subject to at least 95% of the old notes being tendered.

Ampex said it did not have enough cash to make the Sept. 15, 2001 interest payment due on the old notes. Holders entered into two deferral agreements running through Feb. 28, 2002 to give enough time to work out the restructuring.

Ampex, a Redwood City, Calif. visual technology company, said the exchange is intended to "avoid the adverse consequences of a default" on the old notes.

In return for restructuring the debt, Ampex will allocate "substantially all" its net royalty stream from patent licenses to repay debt and will provide holders who accept the exchange a security interest in its patent licenses.

But the company also warned in the SEC filing that if it does not successfully complete the exchange it is unlikely to be able to continue as a going concern.

Bank of New York is acting as depositary for the offer and will contact noteholders but Ampex is not using a dealer or other agent to solicit the tender of notes.

The expiry date has not yet been set.

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