Lexington Precision extends offer again

New York, July 11 - Lexington Precision Corp. said that it had again extended the expiration date of its previously announced offer to exchange new units consisting of 11½% senior subordinated notes due August 1, 2007 and warrants to purchase common stock for its existing 12¾% senior subordinated notes, which were to have matured on Feb. 1, 2000.

The offer, which was scheduled to expire at midnight ET on July 11, was extended to midnight ET on July 31, subject to possible further extension.

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, 2002 that it had begun an exchange offer for its $27.412 million 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 said it 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 numerous 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. 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. 30, Lexington Precision 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, while announcing further extension of the offer, Lexington 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 that 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, with the same level of noteholder participation as previously announced.

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).

It said that if the amended exchange offer were to be 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.

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.

Telefonica de Argentina gets government OK for new exchange offer notes

New York, July 11 - Telefonica de Argentina S.A. said that it had received the necessary legal approvals from Argentina's regulatory agency, the Comision Nacional de Valores, for the public offering of new notes to be issued in connection with its previously announced offers to exchange new notes plus cash payments for two existing series of its own notes, and for two existing series of notes issued by its holding company, Compania Internacional de Telecomunicaciones S.A., or Cointel as it is generally known.

In accordance with the terms of each of the exchange offers, as previously outlined, tenders of the existing notes may not be withdrawn after 11:59 p.m., ET on July 14, except under certain limited circumstances described in the official prospectus and proxy solicitation documents.

As previously announced, Telefonica, a Buenos Aires, Argentina-based telecommunications company, said on June 17 that it had begun its offer to exchange two new series of debt, plus a cash payment, for two series of its own existing notes, and to exchange new notes and cash for the two series of Cointel notes.

Telefonica said it was also soliciting proxies from the holders of the existing Telefonica and Cointel notes that are subject to the exchange offers, to amend or eliminate substantially all of the covenants and events of default contained in those notes.

Multicanal again extends solicitation, tender offer

New York, July 11 - Multicanal SA said that it again extended its previously announced consent solicitation and concurrent cash tender offer for its notes and bank debt to 5 p.m. ET on July 18 from July 11.

Covered by the solicitation and the tender are Multicanal's 9¼% notes due 2002, 10½% notes due 2007, 13.125% series E notes due 2009, series C 10½% notes due 2018 and series J floating-rate notes due 2003. The tender offer also applies to the Buenos Aires, Argentina company's bank debt.

Buenos Aires-based Multicanal said that as of 5 p.m. ET on July 10, holders of approximately $234.7 million, or 44.5% of the existing debt (notes plus bank debt) had either tendered under the cash tender offer or had agreed to participate in the consent solicitation - down from the $244 million, or 46.3% recorded on July 1 and announced on July 3, when the consent solicitation and tender offer were last extended.

Among the holders tendering or agreeing to participate in the consent solicitation, holders of approximately $146.8 million principal amount of the existing debt (34.4% of the outstanding amount) had agreed to the consent solicitation as of July 10, up from $145.8 million (34.1%) recorded as of July 1. Holders of approximately $87.9 million of the debt (10.1% of the outstanding amount) had tendered under the cash tender offer as of July 10, down from approximately $98.4 million of the debt (12.2%) as of July 1.

Under the tender offer, Multicanal is offering to buy up to $100 million of its existing debt - notes or bank debt - at $300 per $1,000 principal amount in cash.

The solicitation is for consent for powers of attorney in favor of an attorney-in-fact to execute an acuerdo preventive extrajudicial (APE), a legal remedy which the company says would afford its creditors an opportunity to achieve a restructuring of the existing debt on a consensual basis. Multicanal believes that the APE procedure "presents important advantages for the Company as well as its creditors, by avoiding the complexities and costs of the [non-consensual] concurso preventivo process."

Upon approval of the APE by the bankruptcy court, holders who accept the solicitation will receive for each $1,000 principal amount of existing debt, at the holder's option either $1,000 principal amount of 10-year step-up notes or $315 principal amount of either 7% seven-year notes or seven-year floating rate. Holders will also receive 598 shares of class C common stock.

Multicanal is seeking to exchange approximately $100 million principal amount of its existing debt for $100 million of 10-year notes, $157.4 million principal amount of its existing debt for $102.3 million of its seven-year notes (either fixed or floating) and capitalize approximately $167.4 million principal amount of existing debt.

Multicanal will not pay any accrued and unpaid interest (including default interest and additional amounts, if any) on existing debt that is exchanged or capitalized under the APE.

The information agent for the cash tender offer and the APE solicitation is D.F. King & Co., Inc. (212 493-6920); the depositary is JPMorgan Chase Bank (212 623-5162).

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