Dobson plans exchange for 12¼%, 13% preferreds

New York, June 30 - Dobson Communications Corp. said it is planning a new exchange offer for its 12¼% senior exchangeable preferred stock and 13% senior exchangeable preferred stock.

The Oklahoma City-based cellular phone company has filed a registration statement for the transaction, but it has not yet become effective.

Under the terms of the exchange, Dobson is offering cash and class A common stock for up to 32,327 shares or 70% of the 12¼% preferreds and 135,029 shares or 70% of the 13% preferreds.

For each preferred share, holders will receive $300 in cash and $844 of stock, based on the volume-weighted average price during the 10 trading day period ending on the second trading day before the expiration of the exchange. There is a minimum of 168.8 shares and a maximum of 211.0 shares.

Dobson is also soliciting consents to amend the preferred stock to eliminate all voting rights other than those required by law and substantially all of the restrictive covenants for 18 months from the expiration of the exchange. After the 18 months, revised covenants would apply as long as 15,000 shares total of the preferreds are outstanding.

Dobson said it has entered into support agreements with holders of 63% of the preferreds under which the investors will participate in the exchange.

Dobson needs tenders and consents from holders of a majority of the preferreds.

Houlihan Lokey Howard & Zukin Capital, Inc. is dealer manager and solicitation agent. Bondholder Communications Group is the information agent (212 809-2663).

On March 16 Dobson abandoned an earlier exchange because the required thresholds of a majority of each series and 75% of the combined total were not met.

Under the old exchange, Dobson had been offering cash and new series J mandatory convertible preferred stock for the existing securities. For each share of preferred stock, holders would receive $301 in cash and one share of the new mandatory convertibles. The new mandatory convertibles would have converted into 209 shares of class A common stock at the holder's option. There would have been an automatic conversion if the volume-weighted average price of the class A common stock for any consecutive 20-day period exceeded $2.25. The new convertibles would have had a liquidation preference of the greater of $560 plus accreted value or the amount to be received on an as-converted basis. The liquidation preference was to initially accrete at 1.5% and then 1% semi-annually. There was a mandatory redemption date of Nov. 1, 2013.

Also as part of the old exchange, Dobson was soliciting consents from holders of each series of preferreds to amend the certificate of designation to eliminate all voting rights, other than voting rights required by law, and substantially all of the restrictive covenants and to waive compliance with the provisions to be eliminated until the proposed amendments become effective or until 18 months from the expiration date of the exchange offer.

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