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World Airways extends exchange for 8% convertibles to consider changes
New York, Sept. 17 - World Airways, Inc. extended the exchange offer for its $40.545 million of 8% convertible senior subordinated debentures due 2004 to 5.00 p.m. ET from 5.00 p.m. ET on Sept. 18.
The Peachtree City, Ga. air charter and wet lease company said it extended the offer in order to consider changes to its terms as a result with informal discussions with significant holders of the securities and recent improvements in the company's business and financial outlook.
As of the close of business on Sept. 16, $529,000 of the convertibles had been tendered or 1.3% of the total outstanding.
The exchange is subject to $38.5 million or 95% being tendered.
As previously announced, the company is currently offering new 8% convertible senior subordinated debentures due 2009 for the existing securities on a one-for-one basis.
The new convertibles have a lower conversion price of $3.20 per share subject to a 120% hurdle compared to $8.90 for the existing securities. Its stock closed at $4.22 Tuesday, up from $2.61 when the exchange was announced. The new convertibles will convert automatically if the stock trades at $6.00 or higher for 20 out of 30 trading days up to Aug. 26, 2005 and $4.00 after that.
World Airways said the exchange is a condition to obtaining approval of a federal loan guarantee for the Air Transportation Stabilization Board.
The company received conditional approval on April 23 for a $27.0 million loan guarantee, covering 90% of a planned new $30 million term loan.
Morgan Joseph & Co. Inc. (888 641-4214) is dealer manager for the offer. MacKenzie Partners, Inc. (800 322-2885) is the information agent.
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