Haights Cross to use payment grace period if exchange offer fails

By Caroline Salls

Pittsburgh, July 23 - Haights Cross Communications, Inc. said it will take advantage of the 30-day grace period for making the $8.4 million interest payment due Aug. 3 on its 12½% senior discount notes due 2011 unless it can complete its exchange offer for the notes on time, according to a company news release.

As previously reported, the exchange offer is scheduled to expire at 11:59 p.m. ET on July 27. The company is offering 120.21 shares of common stock for each $1,000 principal amount at maturity of notes.

Haights Cross said about 74% of the notes had been tendered as of the close of business on July 21, but the exchange offer requires at least 95% of the notes to be tendered.

The company said its current forbearance agreement and credit agreement for its senior secured term loan prohibits it from making interest payments on the notes while it remains in default under the credit agreement.

The credit agreement would be cured upon the successful completion of the exchange offer.

The lender forbearance agreement runs through July 30.

Haights Cross said that if it cannot complete the exchange offer and related restructuring activities, it intends to explore all of its restructuring alternatives, which could include an out-of-court restructuring or a Chapter 11 bankruptcy filing.

Haights Cross is a White Plains, N.Y.-based educational and library publisher.

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