Sea Containers plans exchange for 2003, 2004 notes

Sea Containers Ltd. said Monday (March 24) that it plans to file exchange offers for its outstanding public debt maturing in 2003 and 2004 with the Securities and Exchange Commission this week.

Sea Containers, a Hamilton, Bermuda-based transportation and lodging company, said in its fourth quarter earnings release that it will file to exchange new 13% notes due 2006 for its approximately $159 million of outstanding debt coming due in the middle of this year, which currently carries annual interest rates of 9.5% to 10.5%

The company will also offer new 12.5% senior notes due 2009 for its approximately $99 million of outstanding 12.5% subordinated notes due in 2004.

Sea Containers also said that with respect to its public debt, it had put up for sale its Isle of Man Steam Packet Co. ferry unit, its remaining port interests in the U.K. and its Charleston container manufacturing facility. It called all three assets "highly profitable, and has placed its own valuation on these assets of about $160 million after repayment of underlying debt.

The company is also negotiating a $160 million bank credit secured by the assets held for sale and other collateral so that asset sales, if necessary, do not have to be rushed. This would be a one year standby bridge facility.

In an SEC filing Monday, Sea Containers said it planned to issue up to $158.798 million principal amount of the new 13% notes, to be exchanged on a 1-for-1 basis for its $95.223 million of 9½% notes due 2003 and $63.575 million of 10½% notes due 2003.

It will issue $98.883 million of the new 12.5% senior notes, to be exchange on a 1-for-1 basis by holders of a like amount of the existing 12.5% subordinated notes.

Sea Containers did not initially lay out a timetable for the exchange offer. It said that the offer would be conditioned upon its receipt of valid tenders (not subsequently withdrawn) of at least 50% of the outstanding aggregate principal amount of the existing notes.

It said that it would pay to registered broker/dealers a soliciting brokers' fee equal to 1% of the aggregate principal amount of the existing notes which they tender on behalf of their customers and which Sea Containers accepts for exchange.

Lazard Freres & Co. LLC will be the dealer manager for the exchange offer.

http://www.sec.gov/Archives/edgar/data/88095/000104746903009920/a2106343zs-4.htm

http://www.sec.gov/Archives/edgar/data/88095/000104746903009928/a2106374zs-4.htm

Sweetheart Cup extends offer to make consent payments in note exchange

Sweetheart Cup Company Inc. (Caa2) said on Friday (March 21) that it had extended its offer to make a consent payment to holders of its 12% notes scheduled to come due on Sept. 1 under its previously announced offer to exchange new debt for the notes.

It extended that consent payment offer to 5 p.m. ET on March 27, subject to possible further extension so that it coincides with the previously announced expiration of the exchange offer.

Sweetheart said it had previously received the requisite consents necessary to modify the indenture governing the existing Sweetheart notes, and had executed a supplemental indenture with the indenture trustee which eliminates certain restrictive covenants and other provisions in the indenture governing the notes. The modifications will not become operative until the consummation of the exchange offer and consent solicitation.

Bear Sterns & Co. Inc. (call the Global Liability Management Group toll-free at 877 696-2327 is the dealer-manager for the exchange offer and consent solicitation. D.F. King & Co., Inc. is the information agent (call toll-free at 800 488-8075; banks and brokers call collect at 212 269-5550).

AS PREVIOUSLY ANNOUNCED: Sweetheart Cup, an Owens Mills, Md.-based maker of paper cups and other packaging products for the food-service industry, said on Feb. 14 that it was planning to offer to exchange new 12% senior notes due 2004 for its outstanding 12% 2003 notes. It said that it would also solicit consent of the 2003 noteholders to proposed changes in the notes' indenture that would eliminate most of the restrictive covenants.

Sweetheart said in an S-4 registration statement filed with the Securities and Exchange Commission that it would issue up to $110 million of the new 2004 notes in exchange for all of the outstanding 2003 notes. The new notes would be guaranteed by the company's corporate parent, Sweetheart Holdings Inc, and would be exchanged for the existing notes on a 1-for-1 basis.

It said that holders tendering notes under the exchange offer would also have to consent to the proposed indenture changes. Those holders validly tendering their notes (and thus, consenting to the indenture changes) before a consent deadline and not subsequently withdrawing them would be eligible to receive a consent payment equal to 1% of the principal amount of notes tendered. Holders not tendering their notes by the consent deadline would not be eligible to receive the consent payment.

Sweetheart did not initially set an expiration deadline or a consent deadline for the offer, and said the offer would commence as soon as is practicable after the registration becomes effective.

It said that holders tendering their notes before the consent deadline could withdraw their tendered notes and revoke their consents at any time prior to that deadline, but not afterward. Holders tendering after the consent deadline could withdraw their tendered notes and revoke consents at any time prior to the expiration date. It further said that holders could revoke consents at any time prior to the execution of the supplemental indenture implementing the proposed amendments to the indenture governing the 2003 notes.

The company cautioned noteholders choosing to not tender their notes under the exchange offer that most of the restrictive covenants and the related events of default and certain other provisions in the indenture governing those notes will be removed or substantially modified.

Sweetheart said that completion of the exchange offer would be subject to the satisfaction of several conditions, including - but not limited to - Sweetheart receiving tenders from the holders of at least 90% of the principal amount of the existing notes, and the company obtaining an amendment to its senior credit facility.

On Feb. 27, Sweetheart said that it had begun the previously announced exchange offer for its outstanding 12% 2003 notes, and had begun a related consent solicitation.

The company set the consent deadline at 5 p.m. ET on March 12, while the offer was scheduled expire at 5 p.m. ET on March 27, with both deadlines subject to possible extension.

Sweetheart said that holders could not tender their notes without consenting to the proposed amendments and could not deliver consents without tendering their notes. It said that approval of the proposed indenture amendments would require the consent of holders of at least a majority of the principal amount of the outstanding notes.

The company further said that the exchange offer and the consent solicitation would otherwise take place on terms which the company had previously outlined.

On March 13, Sweetheart said that it had successfully completed the consent solicitation portion of exchange offer.

The company said that as of the now-expired consent deadline of p.m. ET on March 12, it had received the requisite consents necessary to modify the notes' indenture, and had executed a supplemental indenture with the indenture trustee incorporating the desired changes, which eliminate certain restrictive covenants and other provisions in the indenture.

Sweetheart said the modifications implemented by the Supplemental Indenture would not become operative until the completion of the exchange offer and consent solicitation. Any consent payment will be made promptly after the consummation of the exchange offer and consent solicitation.

Achievement of the requisite consents allows the exchange offer to continue; it is scheduled to expire on March 27.

Lexington Precision again extends exchange offer for 12¾% notes

Lexington Precision Corp. said on Thursday (March 20) that it had 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, which was to have expired at midnight ET on March 20, was extended to midnight ET on April 3, subject to possible extension.

Lexington did not give updated figures on noteholder participation in the offer; as of the previous extension announcement, on March 7, $27.209 million principal amount of the 12¾% notes, or 99.3% of the outstanding amount, had been tendered in the offer, approximately the same amount announced on Oct. 31 and in a number of subsequent expiration deadline extension announcements.

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 as originally announced - a number of the terms would be subsequently amended, as indicated - the offer 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 10½% 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 12¾% 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.

A series of similar announcements further extending the offer were subsequently made, most recently on March 7, with the same level of noteholder participation as previously announced.

Also on March 7, Lexington announced several amendments to the previously announced terms of the offer; it said that under the terms of the amended exchange offer, tendering holders of the 12¾% notes will receive new 11½% senior subordinated notes due 2007, in a principal amount equal to the sum of the principal amount of 12¾% notes tendered, plus the accrued interest on those notes for the period of Aug. 1, 1999, through the day before the date the amended exchange offer is consummated (prior to the amendment, only accrued interest through April 30, 2002, was to be converted into new 11½% notes).

If the amended exchange offer is consummated on March 25, the accrued interest would total $465.3750 per $1,000 principal amount of 12¾% notes tendered (up from the previously announced $350.625 per $1,000 principal amount tendered). If all of the existing 12¾% notes are tendered, and the exchange offer is completed, $12.757 million of accrued interest will be converted into new 11½% notes (up from the previously announced $9.611 million of total accrued interest).

Interest on the new 11½% notes will accrue from the date the amended exchange offer is consummated, and will be payable quarterly on each May 1, August 1, Nov. 1, and Feb. 1 (prior to the amendment, interest on the new 11½% notes was to accrue from May 1, 2002).

Tendering holders of the 12¾% notes will also receive a participation fee equal to $30 for each $1,000 principal amount of 12¾% notes tendered. The participation fee will be payable in cash on the date the amended exchange offer is consummated (prior to the amendment, a participation fee of $22.20 per $1.00 principal amount of notes tendered was to be paid in three installments).

Lexington said the amended exchange offer is a component of a comprehensive financial restructuring plan that would also involve a refinancing of the company's senior secured credit facilities, the repurchase, at a discount, of the company's 10½% senior notes, an extension of the principal amount of the company's 14% junior subordinated notes, and a conversion of the accrued interest on the 14% notes to common stock (previously, the company had said that it intended to extend the 10½% notes rather than repurchase them at a discount, and made no mention of converting the 14% notes' accrued interest to common stock). The completion of the amended exchange offer will be subject to a number of conditions precedent, including the refinancing or retirement of all of the company's debt, other than the 12¾% notes, on terms satisfactory to the company. The company decided to amend the exchange offer in order to enhance the likelihood of its completing a refinancing of its senior, secured debt on satisfactory terms.

All other previously announced terms of the offer which have not been specifically amended remain in effect.

The company said it has discussed the amendment to the exchange offer with representatives of the four largest holders of the 12¾% notes, who have indicated their intention to continue to participate in the exchange offer, as amended.

Holders who had already tendered their 12¾% notes and who wish to participate in the amended exchange offer do not need to take any further action. Holders who have not tendered their 12¾% notes but who wish to participate in the amended exchange offer should follow the directions for tendering notes set forth in the amended offering circular. Holders who have already tendered their 12¾% notes but who do not wish to participate in the amended exchange offer should follow the directions for withdrawing tendered notes set forth in the offering circular.

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