InSight again extends exchange offer, now ends May 25

By Caroline Salls

Pittsburgh, May 21 - InSight Health Services Holdings Corp.'s offer to exchange shares of its common stock for up to $194.5 million of InSight Health Services Corp.'s 9 7/8% senior subordinated notes due 2011 has been extended to 5 p.m. ET on May 25, according to a company news release.

As of the previous expiration date of May 21, the company said about $163.5 million of the notes had been tendered to the exchange agent.

As previously reported, InSight launched the exchange offer on March 21 along with a vote solicitation on a pre-packaged plan of reorganization.

Under the exchange offer, for each $1,000 principal amount of notes tendered, noteholders will receive either 40 shares of the company's common stock after giving effect to a 1-for-5.687362 reverse stock split if the exchange offer is consummated without filing pre-packaged Chapter 11 bankruptcy, or 40 shares of common stock after giving effect to a 1-for-6.326392 reverse stock split under a pre-packaged plan of reorganization.

In order to avoid triggering a change of control under the indentures for InSight's senior secured floating-rate notes due 2011, which will remain outstanding following the exchange offer, and the senior subordinated notes, no senior subordinated noteholder may exchange its notes for more than 34.99% of the shares of the common stock that will be outstanding upon the consummation of the exchange offer.

Completion of the exchange offer is conditioned upon InSight receiving tenders for not less than 97% of the notes.

In addition, if InSight meets or waives the minimum tender condition and consummates the exchange offer without filing a pre-packaged Chapter 11 plan of reorganization, the company said it will amend the senior subordinated notes indenture and will pay a one-time cash payment of $50 for each $1,000 of senior subordinated notes to each holder who has consented to the proposed indenture amendments.

The consent payments will be made within 60 days following the closing of the exchange offer.

Senior subordinated noteholders will not receive any consent payments if the company consummates the exchange offer through a pre-packaged plan.

Under the plan, all administrative claims, priority claims, secured claims and general unsecured claims, other than those held by senior subordinated noteholders, will be paid in full.

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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