InSight launches 9 7/8% notes exchange offer, pre-packaged plan vote solicitation

By Caroline Salls

Pittsburgh, March 21 - InSight Health Services Holdings Corp. launched an offer to exchange shares of its common stock for up to $194.5 million principal amount of the 9 7/8% senior subordinated notes due 2011 issued by wholly owned subsidiary InSight Health Services Corp., and the company is also soliciting votes on a pre-packaged plan of reorganization, according to a company news release.

Holders of about 52% of the notes have already indicated an interest to tender in the exchange.

For each $1,000 principal amount of notes tendered, noteholders will receive 40 shares of the company's common stock after giving effect to a 4.70424-for-1 reverse stock split.

Completion of the exchange offer is conditioned upon InSight receiving tenders for not less than 95% of the notes, but the company said it may waive this condition.

Tendering noteholders must also consent to amend the notes indenture to terminate substantially all of the restrictive covenants.

According to the release, the pre-packaged plan of reorganization will attempt to restructure the company's debt on substantially the same terms as the out-of-court exchange offer, and InSight said it only expects to file this pre-packaged plan if the minimum tender conditions of the exchange offer are not satisfied or waived.

No exchange or consent fee will be paid in connection with the exchange offer and consent solicitation, both of which will expire at 11:59 p.m. ET on April 19.

The dealer manager for the exchange offer is Lazard Capital Markets LLC. CapitalBridge (877 746-3583) is the solicitation and information agent.

InSight is a Lake Forest, Calif., provider of diagnostic imaging services.

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