PRG-Schultz says almost all of its 9% preferreds were converted ahead of redemption

By Susanna Moon

Chicago, Oct. 22 - PRG-Schultz International, Inc. said virtually all of its 9% series A preferred stock were converted into common stock in the company's exchange offer.

The redemption date for the preferreds was Oct. 19.

The company said it redeemed the remaining outstanding shares for $44,000, which included dividends accrued to the redemption date. The exchange offer for the $8.4 million liquidation preference of the preferred stock began on Sept. 17.

Holders of the series A preferreds could choose to convert their shares into the company's common shares at a conversion price of $2.84 per share.

The company's stock (Nasdaq: PRGX) closed at $16.02 on Oct. 19.

The company previously said that it expected holders of the preferred stock to convert their holdings rather than have them redeemed since the company's shares had been trading significantly above the conversion prices.

PRG-Schultz also previously said that the new preferred stock liquidation preference is $136.87 per share, and as a result, each share of preferred stock is convertible at the option of the holder into 48.186732 shares until Oct. 18.

In the 2006 exchange offer, the company offered a bundle of new securities comprising 11% senior notes due 2011, 10% senior convertible notes due 2011 and 9% series A preferred stock in exchange for $125 million in principal amount of 4.75% convertible subordinated notes due November 2006.

"The successful turnaround at PRG-Schultz was made possible by the March 2006 acceptance by our noteholders, whose notes were then due in November 2006, of our offer to exchange these notes for a bundle of new securities not due until 2011," James B. McCurry, the company's chairman, president and chief executive officer, said in a press release.

"We are therefore very pleased that the turnaround which they made possible has allowed us to redeem the new securities almost three and a half years sooner than expected," McCurry said.

The Atlanta-based firm is involved in recovery auditing and profit improvement.

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